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Calls for EU container line block exemption review grow louder

Ten associations in the ports, shipping and logistics sectors have called for an immediate review of the EU’s block exemption rules for container lines.

In a joint letter to the European Commissioner for Competition, Margrethe Vestager , the signatories demanded an immediate review of the EU’s Consortia Block Exemption Regulation for the container shipping industry. The regulation allows for the sharing of commercially sensitive information between container lines to enable control of vessel supply, size, and route frequency - exempting lines from certain parts of EU competition law.

The block exemption was last renewed in April 2020 and the signatories said supply chains have suffered huge disruption, blanked and diverted sailings, skipped calls and a quadrupling of freight rates on some routes.

The letter noted investigations in the US which led to the Ocean Shipping Reform Act. The signatories said OSRA “addressed many of the grievances of users and services suppliers to the container shipping lines”, while others in the shipping industry say OSRA lays blame for complex logistical issues at the feet of foreign container lines. Hong Kong recently renewed its block exemption rules for container vessel sharing agreements after a review of the market last year.

“The effects of lockdowns on the production of goods and the shifts in demand due to the effects of the Covid pandemic were certainly significant. But the ability of the shipping industry to collectively manage these impacts, and at the same generate profits totalling over $186 billion in 2021, at the expense of the rest of the supply chain, and ultimately Europe’s consumers, demonstrate that something is wrong,” said the signatories.

A review of block exemption could address container lines’ hoarding of the benefits of exemptions, distributed it more fairly.

“The Regulation’s review will allow all interested parties to submit evidence and arguments as to how the Commission should act to ensure the deep-sea container shipping market operates in a way that is fair and transparent to all parties in the maritime supply chain. This should include consideration of new measures and mechanisms and should allow sufficient time for these to be considered and implemented before the expiry of the current regulation in April 2024,” said signatories.

The letter to the Commissioner was signed by CLECAT (European Association for Forwarding, Transport, Logistics and Customs Services), FEPORT (The Federation of European Private Port Companies and Terminals), the European Shippers’ Council, the European Barge Union (EBU), Global Shippers Forum, European Tugowners Association, International Union for Road-Rail Combined Transport (UIRR), the International Federation of Freight Forwarders (FIATA), International Association of Movers and FIDI Global Alliance.