Europeans extend liner shipping regulation

Europeans extend liner shipping regulation    The European Commission said Monday it has agreed to extend a regulation that will allow liner shipping companies to continue to operate in space-sharing agreements and other sorts of operating pacts for another five years.
   Last October, the EC eliminated the block exemption for liner shipping conferences, bringing to an end the ability of shipping companies to discuss and fix prices. But today’s action extends to April 2015 the ability of shipping lines to charter space on each other's ships.
   The EC explained such agreements “usually allow shipping lines to rationalize their activities and achieve economies of scale. If consortia are faced with sufficient competition, the users of the transport services provided by consortia (such as shippers) usually benefit from improvements in productivity and quality of service.”
   Rod Riseborough, chief executive officer of the container trade statistics subsidiary of the European Liner Affairs Association, said the new regulations were an improvement over a draft issued earlier this year.
   The EC said the regulation “aims at better reflecting current market practices and bringing the consortia block exemption in line with other block exemption regulations for horizontal cooperation between companies. The scope of application of the new regulation has been extended to all liner shipping cargo services, whether containerized or not.
   “The list of exempted activities has been revised in order to better reflect current market practices. The market share threshold has been reduced from 35 percent to 30 percent and the method of its calculation clarified. Finally, the exit-clauses and lock-in periods, in case a member wants to withdraw from the consortium, have been prolonged to better reflect current market practice but still safeguard the carriers’ flexibility,” the EC said.
   Riseborough said that doesn’t mean carriers are automatically in trouble if a consortia has a more than a 30 percent share. But they must perform a self assessment as to whether they are violating regulations.
   More information is available here.