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Vestager prolongs block exemption for liner shipping consortia

European Competition Commissioner Margrethe Vestager approves four-year extension of the so-called Block Exemption Regulation.

Photo: JOHN THYS/AFP / AFP

Container shipping lines get a four-year extension of the so-called Block Exemption Regulation, BER, informs a statement from European Competition Commissioner Margrethe Vestager.

It was expected that Vestager would approve an extension of the exemption, which allows competing container liner companies to collaborate, although ports, shippers and logistics companies have voiced harsh criticisms about the regulation.

"The European Commission has prolonged for another four years the regulation outlining the conditions under which liner shipping consortia can provide joint services without infringing EU antitrust rules that prohibit anticompetitive agreements between companies," writes the Commission in a statement.

The scheme, which was set to be renewed before the end of March, allows container shipping companies to coordinate their networks and utilize space aboard each others' vessels if they have a market share of less than 30 percent.

On the reasons for extending the scheme, the Commission writes:

"More specifically, the Commission has found that the Consortia Block Exemption Regulation results in efficiencies for carriers that can better use vessels' capacity and offer more connections. The exemption only applies to consortia with a market share not exceeding 30% and whose members are free to price independently. In that context, those efficiencies result in lower prices and better quality of service for consumers. Specifically, the evaluation has shown that in recent years both costs for carriers and prices for customers per twenty-foot equivalent unit (TEU) have decreased by approximately 30% and quality of service has remained stable."

With the extension, the exemption is valid until April 25, 2024.

English Edit: Ida Jacobsen

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