The British International Association (Bifa) is advocating for the United Kingdom to eliminate the cartel exemption for container shipping, taking a cue from the European Union’s recent decision to do the same.
The European Union made the decision on Tuesday not to extend the ‘antitrust block exemption for liner shipping consortia’ beyond April 25th next year when the current exemption expires. The British exemption follows a similar timeline. Steve Parker, Director General of Bifa, expressed the organization’s preference to align with the European Commission’s approach and forego maintaining a block exemption for the liner shipping sector in the UK.
This issue has been under consideration in the UK for a considerable period. In January of this year, the Competition and Markets Authority (CMA) announced a review, which surprised Bifa as it initially seemed to lean toward expansion rather than abolishing the cartel exemption.
The largest trade association representing British forwarding and logistics companies, Bifa, has repeatedly voiced concerns about the preferential position of liner shipping. Bifa contends that the exemption distorts competition within the sector and negatively impacts international trade.
Steve Parker emphasized, “Bifa and its members are not opposed to ship carriers. We seek a balanced relationship between shipping companies as carriers and our members as their customers.” According to him, the European Commission made a wise decision, and the British government should follow suit by subjecting shipping companies to competition law.
The European freight forwarding association Clecat also applauds the European Commission’s move to terminate the cartel exemption for container shipping. Clecat has opposed the block exemption for years, arguing against its regular extensions.
Nicolette van der Jagt, Director-General of Clecat, expressed satisfaction that the Commission has heeded the concerns of customers, freight forwarders, and shippers. Clecat has provided evidence that the block exemption no longer serves the purpose of enhancing the efficiency and effectiveness of the sector and fostering added value for the European Union.
Van der Jagt added that Clecat has long contended that the current regulatory framework for the exemption no longer serves its intended purpose. It offers too many opportunities for unintended collaboration, extending well beyond what’s necessary for the operation of the vessel sharing agreements among shipping companies.
In conclusion, Van der Jagt emphasized that the Commission’s decision is a significant step toward rebuilding trust among stakeholders. This is vital for establishing a resilient, integrated, and efficient supply chain while ensuring that liner shipping is subject to the same level of competition control as other sectors, rather than being perceived as having looser competition oversight.
