The European Commission has extended the legislation which allows carriers to operate within alliances without breaking the EU’s anti-competitive rules by a further four years to 2024.
The ‘Consortia Block Exemption Regulation’ lets groups such as the Ocean Alliance (CMA CGM, COSCO, Evergreen), 2M Alliance (Maersk, MSC and HMM) and The Alliance (NYK, ONE, MOL, Yang Ming and Hapag-Lloyd) to operate in Europe.
EU law generally bans agreements between companies that restrict competition, but the Commission has found that the Consortia Block Exemption Regulation results in efficiencies for carriers that can better use vessels’ capacity and offer more connections.
However, the regulation allows, under certain conditions, liner shipping operators with a combined market share of below 30% to enter into cooperation agreements to provide joint liner shipping services.
The two key stipulations are that the combined market share of these groups must be less than 30% and that participants must not fix prices. Consequently, the EU believes alliances lead to lower prices and a better consumer experience.
Specifically, the evaluation has shown that in recent years both costs for carriers and prices for customers per twenty-foot equivalent unit (TEU) have decreased by approximately 30% and quality of service has remained stable.
