Container shipping services consist of the provision of regular, scheduled maritime cargo transport on a specific route. This requires a significant investment which is regularly provided by several shipping companies (“carriers”) cooperating in “consortia” agreements. Consortia can lead to economies of scale and better utilisation of the space of the vessels. A fair share of the benefits resulting from these efficiencies should be passed on to users of the shipping services in terms of better coverage of ports (improvement in the frequency of sailings and port calls) and better services (an improvement in scheduling, better or personalised services through the use of more modern vessels, equipment and port facilities).
Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”) prohibits agreements between undertakings that restrict competition. However, Article 101(3) TFEU allows declaring such agreements compatible with the internal market provided they contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits.
The Commission has been granted the power to make such declarations with respect to certain types of agreements. Such declarations are made by the Commission through measures known as Block Exemption Regulations (“BERs”). The first BER was adopted in 1995 and since then has been prolonged and amended 4 times. The current BER, aiming at ensuring that consumers enjoy a fair share of the resulting benefits, will expire on 25/4/2020.
With the start of the revision process of the Block Exemption Regulation by the European Commission, the European Shippers’ Council is asking its members whether they enjoyed or not a fair share of the benefits and how they feel about repealing or keeping this regulation. ESC is encouraging shippers to respond to ESC survey that is available online till 5 June 2018.
To take the survey, please see here.
For more detailed info on BER, please see here.