UK regulators have provisionally decided not to replace laws exempting liner consortia from competition.
The Competition & Markets Authority (CMA) is not recommending replacing the liner shipping consortia block exemption regulation (CBER) with a further block exemption order.
It believes the regulation should be left to expire on 25 April next year.
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 this year.
“Following this consultation, and in light of further assessment conducted by the CMA, the CMA no longer proposes to recommend replacement of the retained CBER,” the authority said.
“The CMA’s provisional view is that the retained CBER should lapse on its expiry date of 25 April 2024, without replacement.”
The provisional ruling marks a victory for shippers who had demanded that the UK follow the line of European Union regulators.
A final decision will be taken on 15 December, when it will be recommended to the secretary for Business, Energy & Industrial Strategy.
The development deals a further 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 last month to end the CBER.
On 10 October, the European Commission said it would end a legal loophole that exempted liner shipping consortia from Europe’s antitrust rules.
The CBER “no longer promotes competition in the shipping sector”, it said, so the block exemption in Europe will also expire on 25 April.
Liner companies have argued that the consortia are purely operational agreements, allowing them to serve more ports than would normally be possible.
UK freight forwarders welcomed the CMA’s provisional decision.
If made final, it would be “a sensible conclusion to the ongoing container market public consultation”, said Steve Parker, director general of the British International Freight Association (BIFA).
The association was initially surprised earlier in the year because the CMA appeared to issue a provisional position suggesting the extension of a potentially modified CBER.
“So, we are pleased that the CMA has effectively reversed that decision and reached the same conclusion as the EC,” Parker said.
“However, we note that this is a two-stage review.
“There is no room for complacency. The shipping lines have hit out against the EC judgement and we understand that they have been lobbying in London for the UK to retain some form of CBER.
“Given the possibility that the shipping lines will make new submissions to the CMA, BIFA will be working with our members to provide a further argument that supports the decision to let the CBER lapse.”
BIFA said its members had been concerned that practices undertaken by container shipping lines, as well as exemptions, have been distorting the operations of the free market.
The watchdog’s recommendation, if implemented, would allow greater scrutiny of alliances and ensure the lines are fully subject to competition law, BIFA added.
