Ship-owners support Commission in extension of liner consortia block exemption

TOP NEWS / June 3, 2014

EU Consortia

In the Liner shipping the term Consortia defined as a form of cooperation between carriers in specific routes along the supply chain.

It is synthesized a new entity that controls the management of ships and technical, operational and commercial aspects of the members, but the ownership of the vessel belongs to the individual companies/members of Consortia.

Furthermore, Consortia contributes to maintain fair conditions of competition between Liner operators, reduce operating costs by economies of scale and improve the quality of service by introducing new concepts such as Just in Time, Global logistics etc.

Institutional framework for EU Consortia

Specific regulations established for the consortia, which are considered as highly complex types of agreements. Regulation 479/92 and Regulation 823/2000 extended the exemption from Article 81 (3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies.

Basic requirement to benefit a Consortium of exemption from competition rules is to hold a share in the market in which operates less than 35% compared with the total volume of goods transported.

The European Commission (2014.04.02) proceeded through a regulation the block exemption of consortia in the case of Liner shipping suggesting a public consultation in order to discuss the possible extension of this exemption for the next five years. Of course, this proposal is found in agreement with the ship-owners in a period of continuous economic recession in which they are looking intense to reduce the cost caused by the type of market operation that was created before the crisis under the oversupply model.

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Source: Shanghai International Shipping Institute

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