Liner operators ask EU to extend vessel sharing exemptionWritten by Nick Blenkey
The World Shipping Council (WSC), the International Chamber of Shipping (ICS), and the Asian Shipowners’ Association (ASA) have made a submission to the European Commission seeking an extension of the Consortia Block Exemption Regulation (CBER), which expires in April 2024 ang governs vessel sharing arrangements.
The CBER sets the conditions under which shipping lines with a combined market share of below 30% may enter into cooperation agreements to provide joint cargo transportation services.
According to the shipowners’ associations, “vessel sharing is a purely operational measure that enables carriers to use ships more efficiently whilst continuing to compete on price and other commercial terms. Vessel sharing expands the range of destinations and services available to customers and reduces empty space onboard ships, lowering emissions.”
The CBER, they say, facilitates vessel sharing by providing a sector-specific legal framework.
“From an operational and environmental perspective, vessel sharing is like public transport and car-pooling schemes: seeking to maximise efficiency and reduce emissions through the shared use of transport assets and infrastructure, significantly reducing emissions per unit of cargo transported,” says Yuichi Sonoda, Secretary General of the Asian Shipowners Association.
In the wake of COVID-19 induced supply chain bottlenecks and disruptions, and with containership operators racking up record profits, shippers likely take a far less rosy view of vessel sharing.
“The frustration that shippers have understandably experienced from service delays and increased cost has been channeled 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 and not by vessel sharing,” says John Butler, President & CEO of World Shipping Council.
“Vessel sharing is a tool that has been recognized by regulators around the world as providing a foundation for the reliable movement of international trade. As we come out of the pandemic and markets normalize, we need common and predictable regulations across the globe in order to help transportation and trade networks to stabilize,” says Guy Platten, Secretary General of the International Chamber of Shipping.
While EU Block Exemption Regulations for consortia have been continuously in place since 1995, the Commission first adopted the CBER in its current form in 2009. It was adopted for a period of five years and, since then, it has been extended twice following Commission evaluations (first in 2014 and again in 2020). The CBER is due to expire on April 25, 2024 unless the present evaluation results in a further extension.
- Applies only for ocean carriers with a combined market share of below 30%
- Allows for vessel sharing agreements only, to improve service and efficiency
- Strictly prohibits exchange of information on rates. Each member of a VSA determines its own commercial terms, including prices.
- Carriers within a VSA compete with each other, and with other carriers outside of that VSA, when selling their services to customers. Additionally, carriers offer and add their own services outside of VSAs.
Download the WSC, ICS and ASA submission to the European Commission on the renewal of the CBER here.