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Threat on fair level playing field within the maritime logistics chain

FEPORT warns Regulators about a serious threat on fair level playing field within the maritime logistics chain.

EU regulators’ decision to opt for the status quo and to reject necessary clarifications and adaptations of texts can be detrimental to the level playing field within the maritime logistics chains.

During their General Assembly meeting held on November 27th, 2019, FEPORT members have discussed a number of topics including the European Commission’s proposal to prolong the Consortia Block Exemption Regulation (BER) for another 4 years, without modification.

According to the Commission, the findings of the evaluation demonstrate that the objectives and justifications for the Consortia BER remain valid and that the market conditions of the liner shipping sector still appear to necessitate the existence of a sector specific BER.

At the same time, the Commission acknowledges that there is no accurate data regarding the Consortia BER and that it is therefore difficult to assess whether some consortia are below 30% in terms of their market share. According to the Commission’s assessment, only one fifth of consortia falls within the scope of the Consortia BER given that it could be said with certainty that their market shares are below 30%.

“The dearth of data also begs the question of how the Commission monitors the compliance of the three powerful liner shipping alliances that fall outside the scope of the regulation. It is clear that the current framework is no longer adequate to task given ever increasing market concentration that goes hand-in-hand with joint purchasing, as some lines seem to readily acknowledge”, said FEPORT President, Mr Gunther Bonz.

“In short, users of liner shipping services and their service providers have suffered from an increasingly unbalanced market situation since carriers entered into major cooperation agreements. The Commission’s apparent acceptance to prolong the Consortia BER without having information about real market shares is alarming and bewildering”, added Mr Bonz.

The majority of the respondents to the consultation including vessel charterers has called for the inclusion of provisions that would improve the text and guarantee a more balanced relationship between shipping lines, their customers and service providers. Yet, the Commission has proposed to prolong the Consortia BER without any amendments, dismissing the market related arguments of stakeholders in the maritime supply chain who called for modifications.

The EU Commission’s approach as expressed in the Staff working document will reinforce the market unbalances and the lack of transparency that characterizes the monitoring of consortia market shares.

While FEPORT members believe that it is important for the EU shipping industry to benefit from specific instruments such as exemptions to the prohibition of state aid and cartels, they also reiterate their call for more transparency and an enhancement of important texts such as State Aid Guidelines for Maritime Transport and the Consortia BER. FEPORT is convinced that EU shipping as well as its customers and service providers will be more competitive if rules guarantee a level playing field to all parties of the maritime logistics chain.

Texts which have not been modified for 15 years must be updated to take into account market developments and additional provisions that have been adopted by the EU Commission through individual decisions.

FEPORT will prepare a response in reply to the public consultation on the Roadmap and the draft regulation, opened by the Commission on 20 November and share its concerns with all relevant institutional and non-institutional stakeholders.
Source: FEPORT

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