On Friday, 9th February 2024, BIFA was advised by the Competition and Markets Authority (CMA) that it will not recommend to the Secretary of State for Business and Trade that the current Consortia Block Exemption Regulation (CBER) be replaced with a UK block exemption when the existing CBER expires on 25 April 2024.
BIFA has a broad membership, however, over the last 2-3 years there has been a steady increase in forwarding Members against what was perceived as the market dominance of the shipping lines.
The CMA conducted a robust analysis of the deep sea investigating several scenarios and concluded in it’s initial report issued on 17th November 2023 that the conditions did not warrant the continued existence of a CBER for UK maritime movements – the same view had been reached by the EU Commission. Second opinions were invited by the CMA, and BIFA did provide some additional information to support its original arguments. The CMA upheld its original decision that made in the previous December, concluding that self-assessment is the best and most effective way for shipping lines to co-operate.
The CMA concluded that it would not recommend to the Secretary of State for Business and Trade that the CBER be replaced with a UK block exemption, when the CBER expires on 25 April 2024. A copy of the detailed decision which will form the basis if the recommendation to the Secretary State can be found at: Liner Shipping Consortia Block Exemption Regulation – GOV.UK (www.gov.uk)
Reaction to this announcement for whatever reason has been relatively muted but is in line with most freight forwarders thinking. It must be emphasised that BIFA and it’s Members know that shipping lines are essential parties in the global supply chain and hope that this decision will create a balance between them and their customers. A long term stable and successful deep sea container market is in the best interest of all who are engaged in international trade.
Effectively, shipping lines will have to self-assess alliances, vessel sharing arrangement to ensure that these do not break competition law, and raises the possibility of other parties raising a complaint with the CMA. In many ways the CMA’s decision will impact the structure of the liner trade- not the day to day commercial activities. However, it is very clear that moving forward that competition law will have a greater role to play in the commercial relationships between carriers and their customers – it is to be hoped that it will also drive up customer service standards across the sector.
BIFA supports the outcome of the CMA’s comprehensive review and calls on the Secretary of State for Business and Trade to uphold the Agency’s decision.
