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World Shipping Council Submits Additional Information to the European Commission Regarding the Evaluation of the Consortia Block Exemption Regulation (BER)

The World Shipping Council (WSC) engaged RBB Economics to evaluate the evolution of European liner services from 2013-2018, including the efficiencies gained and the pass-on of those efficiencies to customers in EU international trade lanes. RBB’s Report consists of four parts.

Efficiencies and pass-on
In the first part of the Report, using data from Drewry Maritime Research, RBB tracks the development of global average revenue and operating costs per twenty-foot equivalent unit (“TEU”) from 2013 to 2018. The Report demonstrates that, during that period, carriers’ costs per TEU decreased substantially and shipping rates decreased in similar proportions. The close correlation between rates and costs shows that shippers benefit from reductions in operating costs in the form of lower overall freight rates (including surcharges).

UNCTAD connectivity index
The next part of the Report analyzes the UNCTAD connectivity index and concludes that, for the vast majority of EU member states covered by the index, their liner shipping connectivity level has increased over the last five years.

Impact of consortia on service quality
In the third part of the Report, RBB presents and discusses a conceptual example to illustrate that the absence of consortia would have a negative impact on service quality because – absent consolidation – carriers would need to reduce service frequencies in order to maintain utilization.

Asia-North Europe
The final part of the report focuses on the Asia-North Europe trade lane. First, using data from Drewry Maritime Research, RBB compares the services offered on that trade lane in 2013 to those offered in 2018. The report demonstrates that, during this period, the industry has increased capacity and has retained or expanded service coverage between countries in Asia and countries in the EU. For example, in 2013, these services provided direct calls to 20 unique ports in 12 EU countries; by 2018, this had increased to 24 unique ports in 14 EU countries. Second, RBB applies the insights from the conceptual example to the consortia operating on the Asia-North Europe trade, showing that the absence of these consortia would significantly reduce service quality compared to current levels.

Vessel sharing arrangements are essential tools for providing efficient, environmentally responsible, and frequent liner shipping services to countries all over the globe. WSC and its Members and industry association partners will continue to advocate for regulatory structures that support the dependable, predictable liner shipping services necessary to move the world’s international trade.

RBB’s Consortia, pass-on and service quality [PDF]
Source: World Shipping Council

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