Monday, January 13, 2020

Row Over EU Freight and Container Concessions Grows

April Deadline for Change Concentrates Minds
Shipping News Feature

EUROPE – WORLDWIDE – The row over the EU Consortia Block Exemption Regulation (CBER), the device whereby shipping lines are allowed to exchange information and to co-operate so that they can provide 'consortia services' to and from EU ports, continues to brew, with global container carriers firmly in the centre of the controversy.

In November the International Transport Forum called in a report for the CBER to be allowed to expire at its due date, April 2020. The World Shipping Council (WSC) retorted that the report was ‘naive’ and off point as it mainly concerned the global alliances of the major box lines, saying linking these agreements to the CBER showed a lack of comprehension as to how the system works.

Now the Global Shippers’ Forum (GSF) which puts the case for importers and exporters of goods around the world, has added another dimension to the argument, calling on the European Commission to use different evaluation criteria in its review to those currently used. The GSF claims the Commission’s chosen criteria do not adequately assess the evidence of poor service levels and other shortcomings evidenced by shippers, and outlines four ‘customer-facing’ criteria it is proposing, namely:

  • Declaring what data is to be used to enforce the terms of the Block Exemption (the Commission admitted it is difficult to estimate the exact market shares of consortia).
  • Monitoring more closely how shippers’ and other users’ experiences are improved by the workings of the Block Exemption (shippers’ first-hand evidence was discounted in favour of historical survey trends).
  • Assessing more frequently how confident shippers and other users are feeling about the effects of the Block Exemption (currently this will only happen at the time of renewal, i.e. in four years’ time).
  • Providing shippers and other users with quicker and more accessible ways of having price and service anomalies investigated (currently, shippers need to lodge an official ‘complaint’ with the Commission).
James Hookham, GSF’s Secretary General said the proposals would reflect more fairly the customers’ interests, and continued:

“The Commission’s proposal to extend the CBER by another four years seems largely based on its assessment that it saves money for the shipping lines and cuts down on red tape in the Commission. But any Block Exemption is a massive loss of fundamental protections for shippers and other ‘consumers’ of Consortia services under European competition law and the Commission needs a much more robust means of assessing the impacts of the CBER on the entire market.

“Given the major changes that are taking place in world trade and the container shipping industry, it is vital that the Commission takes a forward view and anticipates these effects on shippers as it considers whether to prolong the CBER. After 10 years, GSF believes the Consortia Block Exemption to be life-expired and that it should be replaced by more specific and flexible rules that take much greater account of shippers’ and other users’ interests.

”The Commission needs to remember that the users of Consortia services are in fact European businesses and their customers and suppliers around the world, importing and exporting goods to and from the EU, and that much greater account should be taken of their needs and views before prolonging the CBER.”

Photo: Courtesy Port of Rotterdam.