Policy & Compliance
From Page 13
Department of Business and Trade urging that the CMA’s proposals are implemented in full as it will benefit the wider business in general. We can only hope that the government listens to the CMA’s carefully considered and reasoned arguments for ending the CBER. A meeting of BIFA’s Ocean, Road and Rail Policy Group discussed this subject in some detail. It was highlighted that due to their current market shares that the two Members of the soon-to-be-dissolved 2M Alliance would have limited scope to form new consortia. It was envisaged that the following would operate in 2025; • An Independent MSC • The newly formed Gemini Alliance • The Ocean Alliance • The Alliance. It will be interesting to see the market impact of these changes and whether some new lines could enter the market. Given the high capital costs of running a shipping line and current market conditions, the meeting remained unconvinced of there being any significant new entrants into the market. These proposed changes will not stop all disputes between lines and their customers; there will be ongoing arguments about quay rent and demurrage, etc, exacerbated by who charges whom. However, it is clear that the shipping lines will be under closer and more continuous scrutiny in both the UK and EU. In the UK, competition law will be applicable, and the belief is that the CMA will be monitoring the lines’ conduct, at least for the foreseeable future.
• Self-assessment - Many liners that operate as part of consortia are already required to self-assess because they exceed the 30% market share threshold. The CMA considered that the lapse of the Assimilated CBER would be unlikely to result in liners ceasing participation to a significant extent in consortia. In addition, the CMA stated that a multi- trade consortium may benefit from exemption under the Assimilated CBER where the combined market share of the participating liners does not exceed 30% in each of the markets in which the consortium operates. Stakeholders representing liners had disagreed with the CMA’s approach. They had argued that if the combined market share of members of a multi-trade consortium does not exceed 30% in an individual market, then the consortium may benefit from the block exemption in that particular market. • EU competition law – The CMA stated that all consortia currently serving UK ports also call at ports within the EU as part of the same service. If the UK replaced the Assimilated CBER with a UK CBEO in circumstances where the EU will let the CBER expire, liners operating services calling at both UK ports and EU ports would benefit from automatic exemption under UK competition law, but would need to self-assess under EU competition law. The CMA considered that it is “unlikely that the presence of a UK CBEO in the absence of an EU CBER would result in routes being redesigned so that they called exclusively at UK ports”. At time of writing this article, BIFA has written on behalf of its Members to the Secretary of State for the
“ These proposed changes will not stop all disputes between lines and their customers... However, it is clear that the shipping lines will be under closer and more continuous scrutiny in both the UK and EU.
14 | April 2024
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