The Competition and Consumer Commission of Singapore (CCCS) has proposed extending the validity of the Competition (Block Exemption for Liner Shipping Agreements) Order (LSA BEO) for another five years. This will allow liner shipping companies to continue cooperating on certain activities without facing antitrust scrutiny, reports CCCS.
Public Consultation
CCCS received five responses through the public consultation exercise held from 27 May 2024 to 17 June 2024. The feedback received was generally supportive of the recommendation to renew the LSA BEO for five years.
The current LSA BEO covers cooperation among liners on liner shipping services, including inland carriage of goods (e.g., truck or rail haulage) as part of through transport. CCCS had earlier received feedback from freight forwarders[7] on the possible unlevel playing field between the liners that have competition law immunity for inland carriage, and the freight forwarders that do not. Public feedback indicated no clear evidence of current or impending usage of LSAs involving the inland carriage of goods occurring as part of through transport.
Recommendation To The Minister
CCCS has carefully evaluated the current state and future of the liner shipping industry. Its recommendation considered market trends and developments in the liner shipping industry, international regulations, public feedback, and Singapore’s upcoming maritime developments, including decarbonization and the new Tuas Port. CCCS assessed that the following LSAs will generate NEB for Singapore:
- a) VSAs for liner shipping services improve the global connectivity of Singapore’s port and support its status as a transshipment hub. VSAs also enhance competition among liners by lowering entry barriers for smaller liners to provide services on trade routes and at frequencies that they would otherwise not be able to provide on their own due to lack of scale. VSAs also bring about environmental benefits by enabling liners to share, utilize and deploy larger vessels.
- b) PDAs for feeder services remain relevant to some feeders operating in Singapore. Being able to participate in such PDAs attracts feeders to base their headquarters and operations in Singapore, and to connect their services through the country. Feeders, in turn, attract and anchor main lines to Singapore, thus expanding Singapore’s shipping network to support its status as a transshipment hub. Anti-competitive effects arising from PDAs appear to be limited, as customers of feeders are likely to possess bargaining power.
On balance, CCCS assessed that a duration of five years would adequately balance the needs of the industry for legal certainty in view of Singapore’s upcoming maritime developments and allow CCCS to undertake a timely assessment of the LSA BEO to respond to any change in the industry.
Did you Subscribe to our daily newsletter?
It’s Free Click here to Subscribe!
Source: CCCS
