Shippers Want Change As The EC Evaluation Of CBER Becomes A Point Of Contention

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As the European Commission (EC) continues to investigate whether to prolong the Consortia Block Exemption Regulation (CBER), which permits vessel-sharing, the conflict between shipping lines and their clients is escalating as reported by The Loadstar.

Block exemption

The closing date for evidence submission to the EC was yesterday, and the current CBER expires on 25 April 2024.

Last month, Israel extended its block exemption for three years without any substantial changes.

But it is the EC that both customers and lines want to convince, with both sides yesterday completing out their arguments.

The World Shipping Council (WSC), Asian Shipowners’ Association (ASA) and International Chamber of Shipping (ICS) want the CBER renewed, claiming vessel-sharing helps reduce emissions, increases competition and improves efficiencies.

The lobbying groups added that vessel-sharing was a “purely operational measure”, which expanded the range of destinations and services and reduced empty space on ships.

Bottlenecks & congestion 

The trio also argued that the commission’s evaluation was taking place during unprecedented times that have seen significant bottlenecks and congestion – none of which, they claim, was caused by shipping lines.

John Butler, president & CEO of the WSC, added: “The frustration shippers have understandably experienced from service delays and increased cost has been channelled towards carriers, their vessel-sharing arrangements and the regulatory tools which facilitate such arrangements, including the CBER.

But data shows, and regulators concur, that the problems were caused by factors outside carriers’ control.”

Guy Platten, secretary general of the ICS, explained: “We need common and predictable regulations across the globe to help transport and trade networks stabilise.”

The lobbyists added: “The CBER is an essential regulatory tool that yields significant benefits to the EU, with no downside from a competition or consumer welfare perspective.”

‘Renew’ or ‘Not Renew’

James Hookham, director of the GSF, explained to The Loadstar: “The trouble is that the commission is limiting itself to a very narrow decision – ‘renew’ or ‘not renew’ – whereas the need is for a wholesale rethink and reform.”

“We need the commission to think ‘out of the box, given the much wider impacts the great shipping crisis has had on international trade and world economies since 2020.

The letter added that the associations had “lost confidence that the benefits of the block exemption are being fairly shared and that it is meeting its intended purpose”.

“The experiences, frustrations and dissatisfaction of large swathes of European business with the behaviour of global shipping lines demand a change in approach as a means of restoring trust and confidence in the container shipping industry, which is vital to the economies of member states and meeting the needs of European consumers and businesses.”

Shippers also feel that now it is their turn.

“There are also some massive unanswered questions about compliance and enforcement of the CBER’s conditions that the commission could usefully answer in the course of this evaluation, and the robustness of consortia operation at times of market stress.”

 

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Source: The Loadstar

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