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Trade organisations call on EU for urgent review into container shipping sector

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BRUSSELS : Some 10 trade organisations, representing the owners and forwarders of cargo, port terminal operators and supply chain members are demanding an immediate start to the review of European Union’s Consortia Block Exemption Regulation for the container shipping industry.

The Regulation exempts container shipping lines from many of the checks and balances of EU competition law and permits them to exchange commercially-sensitive information to manage the number and size of ships deployed and the frequency and timing of sailings on trade routes around the world.

“European businesses and other parties in the supply chain have suffered huge disruption to the movement of goods by container shipping since the Regulation was last renewed in April 2020,” the letter wrote.

The letter added that many sailings are being cancelled or diverted to other ports, and ports being bypassed (‘skipped’) at short notice.

At the same time shipping rates have more than quadrupled on many routes and continue to remain three to four times higher than in 2019 before the pandemic.

“The effects of lockdowns on the production of goods and the shifts in demand due to the effects of the COVID-19 pandemic were certainly significant. But the ability of the shipping industry to collectively manage these impacts, and at the same generate profits totalling over $186 billion in 2021, at the expense of the rest of the supply chain, and ultimately Europe’s consumers, demonstrate that something is wrong,” the signees wrote.

Benefits of the exemptions from general competition law enjoyed by the shipping lines “are not being shared fairly” between the lines and the rest of the economy, according to the signees.

Signatories point towards the passing of the new Ocean Shipping Reform Act in the US and greater crackdowns on unfair pricing and shipping strategies from carriers.

The Regulation’s review will allow all interested parties to submit evidence and arguments as to how the Commission should act to ensure the deep-sea container shipping market operates in a way that is fair and transparent to all parties in the maritime supply chain.

This should include consideration of new measures and mechanisms and should allow sufficient time for these to be considered and implemented before the expiry of the current regulation in April 2024, the signatories added.

The 10 companies are: European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT); Federation of European Private Port Companies and Terminals (FEPORT); European Shippers’ Council (ESC); Global Shippers Forum; FIATA International Federation of Freight Forwarders Associations (FIATA); International Association of Movers (IAM); International Union for Road-Rail Combined Transport (UIRR); FIDI Global Alliance; European Barge Union (EBU); European Tugowners Association (ETA).

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