Following the call for evidence of the European Commission, in the framework of the review of the Consortia Block Exemption Regulation launched on August 9th, 2022, FEPORT, like other sister organizations and interested parties has provided its comments on whether the decision taken in 2020 has had positive or problematic effects on the functioning of the maritime logistics chain.
As stated in the joint call co-signed by FEPORT and other trade associations last July 2022[1], European businesses and other parties in the supply chain have suffered huge disruptions in the movement of goods since the Regulation was last renewed in April 2020, with many sailings being cancelled or diverted to other ports, and ports being bypassed (‘skipped’) at short notice. And all these disruptions cannot be solely attributed to COVID 19 as the recent figures collected by institutions and consultancies[2] prove it.
During the last CBER review in 2018, FEPORT was already of the opinion that a thorough assessment was needed. It is now becoming not only urgent but also crucial to conduct a proper evaluation of the effects of the CBER and tackle several other important aspects that were neglected during the last review and which led to the renewal of the CBER in 2020.
The renewal of the CBER without any modifications has led to problematic developments among others due to the level of consolidation in the market, the lack of monitoring of the market shares of the alliances and their use of consortia.
The fundamental flaws in the methodology and in relation to the five criteria[3] (used by the EU Commission to justify its decision to renew the CBER in 2020) that the joint CLECAT, FEPORT, ESC and ETA legal analysis[4] (procedural and substantive) exposed are still valid from our point of view.
During the last review, the EU Commission did not obtain the relevant price and market share data. As the Commission Staff Working Document published by the EU Commission in November 2019 demonstrated, it was unclear which consortia are still covered by it since it is difficult to monitor whether or not the 30% market share threshold condition is met.
The landscape of the liner shipping industry has changed and carriers do not limit their services to port-to-port services; they also exchange data on services which relate to the port and land side which is made easier with developments in the area of big data and business intelligence and analytics – all of this was not available to the liner shipping industry during the 1990s’ reviews of the BER. The impact of the ongoing vertical and horizontal integration is that the relevant market is no longer a port-to-port maritime transport service but can also relate to a door-to-door service.
The situation prevailing in the market i.e., alliances, consolidation, cross-linkages between consortia etc, which has been totally ignored in 2019, should be considered in the framework of the ongoing review.
While collaboration between liner shipping firms can be considered as a necessity, the lack of clarity on the content of the consortia agreements i.e technical collaborations and the exchange of commercially sensible information has led to a counterproductive effect both for regulators and other stakeholders of the maritime logistics chain. The existence of a BER that does not take into account the evolutions in the market, has prevented regulatory authorities from having access to the details since their collaboration remains very limited.
We hope that the EU Commission will use all relevant means and methods that may allow to conduct a proper review of the CBER. There is a need to restore trust and a real level playing field within the maritime logistics chain.
FEPORT calls for a real dialogue with stakeholders and experts to choose the appropriate methodology that will allow the EU Commission to overcome the shortcomings and flaws of the 2019 Staff Working Document[5] and really objectively assess the CBER’s effects.
Sufficient time allocated to the data collection will certainly also be a key success factor for a meaningful assessment. There is no urgency to publish a Staff Working Document in Q4 2022 as we still have 2023 to proceed to a holistic review. Unless, we are heading to a “bis repetita outcome”…??
Source: FEPORT