www.bifa.org


Policy & Compliance


EC opens block exemption regulation to consultation


BIFA believes it is important that Members express their views, to be considered for submission to the Commission which has to decide whether to prolong, amend or abolish the Consortia Block Exemption Regulation


BIFAlink


The European Commission launched a public consultation on 27 September for the evaluation of the Consortia Block Exemption Regulation (BER). The consultation will be open for 12 weeks until 20 December 2018. BER provides an exception to the prohibition


of any agreements between companies that restrict competition, according to Article 101(1) of the Treaty Functioning of the European Union. Under the BER, certain agreements can be


declared compatible with the Single Market if they contribute to improving the production or distribution of goods, or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits. According to the current Consortia BER, under


certain conditions, liner shipping services that require significant levels of investment can be provided by several companies as joint cargo transport services, called consortia agreements. This leads to economies of scale and better use of the vessel space.


Qualifying criteria To qualify for this exemption and provide joint cargo transport services, the shipping lines must have a combined market share of below 30%. In theory, where such consortia have sufficient


competition, they are not used to fix prices nor share the market, and their users may benefit from improvements in productivity and service quality. As the current Consortia BER expires on 25 April 2020, the Commission is seeking the views of the stakeholders to assess whether the


November 2018


Consortia BER is still effective in facilitating economically efficient cooperation that benefits consumers, as well as its effect on costs, its relevance to modern industry and coherence with competition rules. The timing of this review is fortuitous, given


the current market conditions affecting the deepsea liner industry. There is hardly a day that passes without a report indicating the problems in the marketplace. There is a strong feeling that the new alliances are not delivering any benefits for customers and have significantly reduced choice, competition and service levels. Schedule reliability has been at record lows for almost all of 2018 and there has been the recent furore regarding fuel surcharges, all of which BIFA believes are indicators that the BER needs careful review. We feel that it is important that Members


express their views to BIFA, and we will forward these on to CLECAT, which represents us at EU level. This information will be considered for inclusion in any submission to the Commission, which has to decide whether to prolong, amend or abolish the Consortia BER. CLECAT is very interested in the evaluation process of the Consortia Block Exemption Regulation (Commission Regulation 906/2009) as the review


has been launched at a time when consolidation and the establishment of new alliances are still ongoing and need to be assessed.


Generous exemption The Consortia Block Exemption Regulation is a generous exemption from competition rules and, as it has an impact on actors in the logistics supply chain, it needs to be properly assessed. BIFA will in general maintain that consortia represent a legitimate business mechanism for otherwise competing liner shipping companies to improve their offer to customers. However, the carriers have to demonstrate that they will deliver these benefits to their customers. The roadmap can be found at:


http://ec.europa.eu/competition/consultations/20 18_consortia/roadmap_en.pdf and the public consultation at: http://ec.europa.eu/competition/consultations/20 18_consortia/index_en.html BIFA Members’ views on this consultation


should be sent to r.windsor@bifa.org by 1 December.


BIFA is grateful to CLECAT for permission to reproduce this article, which originally appeared in its newsletter 2018/35.


15


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20