The European tug industry is calling on the European Commission (EC) to halt an exemption to European Union competition regulations that enables container liner consortia to negotiate port services and logistics
This is despite the EC extending the consortia Block Exemption Regulation (BER)* from EU rules forbidding collusion by companies in forming consortia that dominate an industry.
This BER was originally allowed for the container industry to enable liner companies to form consortia to improve their economies of scale and utilisation of worldwide container capacity.
BER needs to be re-evaluated and approved by the European Commission every four years; it was last reviewed in 2014 and was due to expire on 25 April 2020.
Following an evaluation in 2019, the European Commission decided to extend this BER for another four years.
However, the European Tugowners Association (ETA) in collaboration with other associations has questioned the Commission’s evaluation and decision and is calling for the existing BER to expire in April 2020.
ETA joined forces with the association of European freight forwarders, logistics service providers and customs agents (CLECAT), European Shippers Association (ESC) and FEPORT (Federation of Private European Ports).
ETA thinks there were significant shortcomings in the European Commission’s evaluation. “Because of these significant shortcomings, ETA sustains it is not admissible for the European Commission to simply extend the Consortia BER for another four years,” ETA said in a statement.
“In those four years, the current Consortia BER regime could cause serious and irreparable harm to the European maritime logistics sector.
“At most, the European Commission should extend the Consortia BER for just one year, during which a proper review is conducted. If not, it must let the BER expire in April 2020.”
ETA expressed, in its evaluation, the European Commission failed to:
ETA also said the European Commission failed to recognise, despite the evidence provided in the relevant International Transportation Federation (ITF) reports including its report on the Impact of Mega ships (2015) and the more recent ITF study on liner shipping alliances, that the reduced possibility of cost rationalisation has resulted in a continuous deterioration in the quality of service and therefore an erosion rather than increase in economic benefits to share with users.
*Consortia Block Exemption Regulation from the application of Article 101 of the Treaty on the Functioning of the EU