“Serious threat” to fair competition warning

CMA CGM CMA CGM is part of the Ocean Alliance. Image: CMA CGM
Industry Database

Feport has warned regulators about what it deems to be a “serious threat” to fair competition within the maritime logistics chain.

Members of Feport have discussed the European Commission’s proposal to prolong the Consortia Block Exemption Regulation (BER) for another four years, without modification, but Feport said this approach will reinforce the market unbalances and the lack of transparency that characterises the monitoring of consortia market shares.

According to the Commission, the objectives and justifications for the Consortia BER remain valid and 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, said Feport. 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%.

Monitoring risk

“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, 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.

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, but 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.

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