European shippers call for revision of competition rules
TEN organisations, which represent owners and freight forwarders; port terminal operators; and other sectors dependent on container shipping, have called on the European Commission to undertake an immediate review of the EU Consortium Block Exemption Regulation for the container shipping industry.
The regulation exempts container shipping companies from many of the checks and balances of EU competition law in certain circumstances. Additionally, in certain circumstances, the regulations allow them to exchange commercially sensitive information to manage the number and size of vessels deployed and the frequency and timing of crossings on trade routes around the world. The regulation only applies to operators whose combined market share is less than 30%. It does not allow shipping companies to fix prices.
In a statement, the organizations said that European businesses and other parts of the supply chain have suffered huge disruptions in the movement of goods by container shipping since the last renewal of the regulations in April 2020, many crossings that have been canceled or diverted to other ports, and ports to be bypassed at short notice.
“At the same time, shipping rates have more than quadrupled on many routes and continue to remain three to four times higher than in 2019 before the pandemic,” the organizations said.
“The effects of the closures on the production of goods and changes in demand due to the effects of the Covid pandemic have certainly been significant. But the ability of the shipping industry to collectively manage these impacts, and at the same time generate profits totaling more than $186 billion in 2021, at the expense of the rest of the supply chain and ultimately , of European consumers, shows that something is wrong.
“The benefits of general competition law exemptions enjoyed by shipping companies are not shared equitably between the companies and the rest of the economy, and this in itself is a compelling reason why the block exemption should be reconsidered. urgently.”
In a letter to the European Commission, the signatories recall the recommendations of investigations carried out in the United States by the Federal Maritime Commission, leading in May to the adoption of a new Shipping Reform Actresponding to many of the complaints of users and service providers to container shipping companies.
The FMC, in its Survey 29, “The Effects of COVID-19 on the U.S. International Shipping Supply Chain”determined that high ocean freight rates since the start of the pandemic are the product of market forces, not collusion among shipping carriers.
The report presented the findings of a two-year investigation.