European Liner Affairs Association (ELAA) has lodged its submission with the European Commission (EC) outlining recommendations to be included in the review of Regulation 823/2000 that grants Block Exemption for liner shipping consortia.
ELAA, the representative body for container shipping lines in Europe, supports both the review of the EC Regulation on consortia and the Commission’s recent public statements that this will result in the adoption of a new block exemption.
ELAA believes that the review is critical as a renewed Block Exemption Regulation (BER) for consortia, along with up-coming Commission Guidelines for the application of competition rules, will give the liner industry a solid framework for operation as it adapts to a regulatory environment post the demise of liner conferences in Europe.
The current BER 823/2000 was most recently amended in 2005, but the last in-depth review by the Commission was in 1999 and the ELAA contends that changes in the operational nature of the liner shipping industry and consortia in particular should now be taken into account.
In reacting to recent EC indications that the BER will be maintained, Chris Bourne, Executive Director of ELAA commented, ‘I am pleased that consortia are here to stay as they make sense for all parties. All the lines use consortia and in many cases they are the only way in which smaller lines can remain competitive. Our customers are in support of consortia as they help to maintain high levels of port choice and service during periods of variable market demand. Environmental contingencies are also well catered for as a result of the efficiencies created by consortia operation.’
ELAA believes there are two main areas in which the current BER needs updating. References to Regulation 4056/86 and Liner Conferences must clearly be deleted and the scope over which consortia are allowed to operate needs to be extended to reflect the growth in volume and trades that has occurred over the last 10 years since the last review.
ELAA’s submission of recommendations details the references to Conferences that can be deleted but also suggests the abolition of various other devices, such as joint Bills of Lading, that are obsolete and serve to make the legislation unnecessarily complex. ‘A Working Group of ELAA Members has been considering both its own and customers’ needs in relation to consortia and their activity as far into the future as 2015,’ revealed Bourne. ‘We have incorporated a number of its suggestions for improvement to the BER in our submission. For example, on certain trades market share thresholds above which a consortium is barred from operating, are too low for practical purposes. In addition, the 36 month limit to consortia agreements is also impractical these days as vessel owners and capital providers are demanding commitments of much greater length than this,’ he explained.