EC ends liner shipping consortia antitrust exemption

EC ends liner shipping consortia antitrust exemption
Image by Niklas from Pixabay
  • The European Commission is ending the liner shipping consortia exemption from European Union antitrust rules
  • The Consortia Block Exemption Regulation will expire on April 25, 2024
  • The decision followed a review initiated in August 2022, which found that CBER was no longer effectively promoting competition in the shipping sector
  • The evaluation revealed CBER’s impact had been limited and inefficient from 2020 to 2023, offering minimal cost savings to carriers
  • Smaller carriers also found it increasingly challenging to cooperate and provide alternative services in competition with their larger counterparts
  • Despite the end of CBER, cooperation between shipping lines remains legal under EU antitrust rules

The European Commission (EC) is not extending the liner shipping consortia exemption from European Union (EU) antitrust rules.

The EC concluded that the Consortia Block Exemption Regulation (CBER) — which essentially allowed shipping lines to cooperate through joint cargo transport services, often referred to as consortia — no longer promotes competition in the shipping sector; offered modest cost-saving advantages for carriers due to the small number and profile of consortia falling within the scope of CBER; and no longer effectively facilitated cooperation among smaller carriers, hindering their ability to provide alternative services and compete with larger counterparts.

The regulation will expire on April 25, 2024, as scheduled.

“The expiry of the CBER does not mean that cooperation between shipping lines becomes unlawful under EU antitrust rules. Instead, carriers operating to or from the EU will assess the compatibility of their co-operation agreements with EU antitrust rules based on the extensive guidance provided in the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation,” the EC Directorate General for Competition (DG COMP) clarified.

In a statement, the World Shipping Council (WSC) said it is carefully examining the basis for the EC’s position and anticipates further dialogue to ensure regulatory clarity.

“We appreciate the DG COMP’s recognition of the many benefits of vessel sharing to European industry and consumers, even if we disagree with the logic behind the recommendation to discontinue the CBER. The shift to general EU antitrust rules will create a period of uncertainty as carriers adjust to the new legal structure. Nevertheless, vessel sharing agreements will remain a fully legal and supported way for carriers to ensure efficient and sustainable transport for Europe,” said John Butler, President & CEO of WSC.

The EC decision follows a review initiated in August 2022 to evaluate CBER’s performance since 2020. The review gathered feedback from stakeholders in the maritime liner shipping supply chain, including carriers, shippers, freight forwarders, ports, and terminal operators.

Prior to the evaluation, the EC engaged in regular discussions with market participants, competition, and regulatory authorities within Europe, the United States, and other global jurisdictions.

The discussions addressed challenges in the shipping sector, along with questionnaires and an independent fact-finding study focusing on the effects of the COVID-19 pandemic on shipping operations and the maritime supply chain.