Shippers have welcomed the UK’s decision not to replace laws exempting liner consortia from competition.
In its final decision published on Friday, the Competition and Markets Authority (CMA) said it will not recommend replacing the liner shipping consortia block exemption regulation, or CBER, with a further block exemption order.
It said the regulation should be left to expire on 25 April this year, in line with European Union consortia legislation which ends on the same day.
The CMA said the body “no longer has sufficient certainty that consortia will produce efficiencies that outweigh their potential impact on competition”.
It added that self-assessment of competition compliance — applicable where the market share of a consortium exceeds 30% — was “already routine”.
The development deals a blow to the container shipowner lobby — led by the World Shipping Council — which had appealed to the competition regulator not to follow the EU’s decision to end the CBER.
It comes just four months ago after the European Commission closed a legal loophole that exempted liner shipping consortia from Europe’s antitrust rules.
Self-assessment better
The development marks a victory for shippers that had urged the UK regulator to ratify its provisional decision on the CBER issued in November.
Shippers had lobbied against replacing the UK CBER with a new liner shipping consortia block exemption order.
The final decision was “good news for member businesses which ship goods internationally”, said Nichola Mallon, head of trade at lobby group Logistics UK.
“Logistics UK acknowledged the robust methodology, thorough analysis and scenario modelling used by the CMA in reaching this conclusion, and agreed that the conditions to warrant a CBER do not exist,” she said.
“In addition, our members believe that self-assessment is the best and most effective way for cooperation to be undertaken by shipping lines,” she added.
“We believe that UK trade is best facilitated by solutions that find the right balance between the needs of, and benefits to, shipping lines, exporters and importers shipping goods.”
The CMA will hand its recommendation to the UK secretary for business, energy and trade.
“Logistics UK is now looking to the government to implement this recommendation,” Mallon said.
Competition watchdog
The CBER sets out an automatic exemption for liner shipping companies seeking to cooperate and provide joint services through “consortia”.
It has been the subject of a review by the competition watchdog since January last year.
Liner companies have argued that the consortia are purely operational agreements, allowing them to serve more ports than would normally be possible.
Shippers lobbies including the British International Freight Association had argued that the watchdog’s recommendation would allow greater scrutiny of alliances and ensure the lines are fully subject to competition law.
