EU Decision Threatens Future Of Alliances

The European Commission has just announced that it will NOT be renewing the exemption, that allows carriers to operate within alliances, when the current legislation expires on 25th April 2024.

The Consortia Block Exemption Regulation (CBER) was introduced in 2009 to allow carriers to continue vessel-sharing agreements after the old conference system was considered to break monopoly rules. CBER was then extended in both 2014 and 2020.

According to a report in The Loadstar, the EC has now concluded that 'CBER does not appear to be fit for its purpose any more, as it does not fulfil the criteria of effectiveness, efficiency and EU added value'.

The legislation has been under review since 2020, which included wild increases in ocean freight levels during and immediately after the height of the pandemic, leading to huge profits for carriers.

While the EC did not outright blame this on CBER, it suggested 'its effectiveness and efficiency during this unprecedented period was at best, limited', and noted that 'the widespread opposition from shippers, forwarders, unions and port operators to extending the regulation showed deep divisions among supply chain partners'.

The decision suggests a move towards general EU antitrust rules, which is likely to create a period of uncertainty. While this does not mean an end to vessel sharing, there may be more EC focus on Alliance collaboration, especially with regard to pricing.

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