Monday 24th Oct 2016 - Logistics Manager

EU shippers oppose renewal of exemptions

The European Shipping Council has opposed renewal of the Consortia Regulation which constitutes an exemption to the competition rules which applies to groups of operators, that streamline operations and costs, by sharing the technical means to provide a regular line.

The present regulation which is due to expire in April 2015 entered into force in April 2010.

It says that this form of co-operation does not allow concerted pricing policies or information exchange that can influence them.

In 2009, ESC agreed to support the renewal of the exemption because it was considered appropriate, at that time, to allow ship-owners to gradually get acquainted with the general competition rules following abolition of conferences.

But the council says that in real world and shippers’ experience, there are recurrent capacity reductions, cancellation of departures and even stop booking. This is perceived as a manipulation of capacity which is in most cases destabilizing logistics systems and clearly influence prices.

In particular, shippers refer to the application of slow steaming which was imposed unilaterally, without consultation with the cargo owners and without a mechanism which would allow a fair win-win situation in such application.

As an example, the reduction of fuel costs generated by the slow steaming has not led to any reduction in fuel surcharges. Therefore, shippers have not perceived any benefits gained deriving from the overall exemption system.

The ESC has concerns, including the fact that these agreements promote concerted manipulation of capacity available on the market.

It says that “in line with a truly open market, we must conclude that the BER [block exemption regulations] have fulfilled their purpose.”