NEWS\\\


The European Commission is to extend the Consortia Block Exemption Regulation by another four years,


following a


consultation with the industry and its customers. It concluded that the regulation, which allows the operation of alliances and consortia between lines (but not shipping line ‘conferences’) did not materially reduce competition. The current exemption is due to expire on 25 April next year. Shipper groups had been pressing for an end to


the


exemption, arguing that it had harmed service levels and increased freight rates.


head of


Freight Transport Association global and European


policy Pauline Bastidon (pictured) said that she and shippers generally were “very disappointed though not surprised” at the decision, saying that the exemption had been “simply renewed with no mitigating factors”. Although the extension has formally been extended


not


yet and further consultation is due to take place, to which FTA would respond, Bastidon is not optimistic. FTA would however continue to voice its concerns and concentrate its efforts on getting the exemption overturned when


Sulphur surcharges not wanted or needed, says FTA


The Freight Transport Association in Northern Ireland says it is concerned over additional shipping surcharges imposed by lines to meet the cost of new sulphur limits in marine fuel, describing them as an old-fashioned hang-over from a previous era. Managing input cost changes is a normal part of business and can be dealt with through fuel cost adjustment factors, or just anticipating the likely cost to come and including it in contract prices. “Surcharges are a bad


response to this change” said policy manager for Northern Ireland, Seamus Leheny. “While the industry has been expecting increased costs


as a result of the new rules around low sulphur fuel, a new surcharge mechanism seems unnecessary.


This is the new


normal, so shipping companies should be including this in normal commercial pricing arrangements.” He


added “These changes


have been known about for a long time and could have been factored into all business plans for 2020.


They are not


temporary, nor are they different to what is being done anywhere else in the world. FTA wants the shipping companies to move away from this approach as quickly as possible as we see no need for this additional charging mechanism.”


it next comes up for renewal, in a further four years’ time. Meanwhile, a report by the


OECD’s International Transport Forum pointed to an increase in cancelled sailings and a decline in service quality, a trend that was continuing, said Bastidon. Frustratingly, for shippers,


much of the data on consortia including whether individual groupings are above are below the 30% threshold at which consortia are allowed are not


Issue 8 2019 - Freight Business Journal


available to shippers in Europe, Bastidon says. The situation in the US, where the federal maritime Commission has oversight of the process, is much clearer, she added. To add insult to injury,


the summary version of the Commission’s report does not even mention the shippers’ dissenting view, although it is included in the full version of its report. Likewise, the EU forwarders’


3


decision “are in stark contrast to the conclusions of the synopsis report of the stakeholder consultation, published earlier this year”. It


said that there was noticeable polarization of “a the


umbrella body Clecat noted that the ‘roadmap’ published by the Commission and the proposed


replies between the groups of stakeholders” with carriers mainly supportive of the block exemption but the majority of shippers, forwarders and port/ terminal operators warning of its negative effects and advocating either cancellation or modification.


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