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EU Ends Decades-Long Exemption for Cargo Shipping in Bid to Boost Competition

By  |  October 10, 2023
EU Ends Decades-Long Exemption for Cargo Shipping in Bid to Boost Competition

European Union (EU) antitrust regulators have announced that cargo shipping companies will no longer benefit from a long-standing exemption from EU rules designed to prevent anti-competitive agreements. This change comes as EU authorities have grown to believe that the exemption, known as the Consortia Block Exemption Regulation (CBER), no longer serves its intended purpose of fostering healthy competition within the industry.

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    Initially introduced in 2009, the CBER permitted liner shipping operators, provided their combined market share remained below 30%, to collaborate in offering joint cargo transportation services. However, they were required to refrain from fixing prices or dividing markets among themselves, as reported by Reuters.

    The European Commission, acting as the competition enforcer for the 27-country EU, has decided not to extend the CBER exemption beyond April of the coming year. The Commission stated, “Given the small number and profile of consortia falling within the scope of the CBER, the CBER brings limited compliance cost savings to carriers and plays a secondary role in carriers’ decision to cooperate.”

    Furthermore, the Commission noted that over time, the CBER had ceased to facilitate cooperation among smaller carriers, preventing them from offering alternative services to compete with larger industry players. It is hoped that removing the CBER will now encourage a more competitive environment within the cargo shipping sector.

    With this change, cargo shippers interested in cooperating will need to assess whether their collaborations comply with EU antitrust regulations. The EU competition watchdog has historically granted exemptions in certain sectors to promote competition, but this shift reflects the EU’s commitment to leveling the playing field in the cargo shipping industry.

    Source: Reuters