The World Shipping Council (WSC), the European Community Shipowners' Associations (ECSA) and the International Chamber of Shipping and ICS, have welcomed the EU's extension of consortium exemption for another five years until April 2020.
Legal certainty means that consortia arrangements, or amendments to those arrangements (including terminating those arrangements and entering into different ones) can be evaluated solely on operational merits, according to the shipowners.
European competition authorities have favoured consortia that share vessels to reduce costs rather than joint pricing, unlike conferences which set freight rates together.
Shipper groups have argued that the block exemption for liner shipping due to expire in 2015 is no longer relevant because of the size of mega alliances like the P3 which fall outside of normal competition laws.
The shipowner groups agree with Brussels that the rules "have not substantially changed" and modifications have been made to the rules of consortia.
Any changes to this legal framework should be avoided to prevent compliance costs to operators in the industry, said the EC, reported Lloyd's List.
The rules stipulate that any alliance with a market share of 30 per cent or less is exempt from EU competition rules and those above the threshold are not illegal, but must self-assess to ensure no abuse of dominance. This is likely to be applied to the P3 Network.
Improvements in consortia are found in productivity and "frequency of sailings and port calls, or an improvement in scheduling as well as better quality and personalised services through the use of more modern vessels and other equipment, including port facilities," said the EC.
The WSC, ESCA and ICS agree that the basis of the consortia block exemption since 1995 has remained largely unchanged with no regulatory barriers to carriers entering the market.
But issues of overcapacity causing high capital and operating costs has made it very challenging for vessel operators in a highly competitive environment but "a favourable one for the European importers and exporters that use the services of those vessel operators."
IMO&EU NEWS
03 April 2014 - 03:17
Shipowners welcome EU's five-year extension of consortia legality
The World Shipping Council (WSC), the European Community Shipowners' Associations (ECSA) and the International Chamber of Shipping and ICS, have welcomed the EU's extension of consortium exemption for another five years until April 2020.
IMO&EU NEWS
03 April 2014 - 03:17
Shipowners welcome EU's five-year extension of consortia legality
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