The CMA announced at the end of last week that it is launching a consultation on its proposed recommendations to the Secretary of State for Business, Energy and Industrial Strategy regarding the retained Liner Shipping Consortia Block Exemption Regulation (retained CBER).
The purpose of the consultation is to seek views on whether the UK government should keep a similar block exemption regime for the liner shipping industry, as the retained CBER originating from EU law will expire on 24th April 2024.
Responses will inform the CMA’s final recommendation to the Secretary of State on whether to replace the retained CBER when it expires on 25 April 2024.
While the British International Freight Association welcomes the news of the launch of the consultation and will be encouraging its members that are operational in the deep-sea container market to read the proposal document and share their responses; the trade association hopes „that trade has not been presented with a fait accompli”, says BIFA Director General, Steve Parker.
“BIFA was somewhat surprised that as part of the announcement, the CMA issued a provisional position which in effect only gives one position – the extension of a potentially modified CBER into UK legislation,” Parker added.
In the recent past, the UK’s main trade association for freight forwarding and logistics companies has said that its members are extremely concerned that practices undertaken by container shipping lines, as well as easements and exemptions provided to them under competition law, have been distorting the operations of the free market to the detriment of international trade.
Parker says that BIFA, and its members, are not anti-shipping line but the association wants to ensure that there is a suitable balance between them as carriers, and the members as customers, points made during meetings with the CMA in 2022.
“The facts speak for themselves. During a period that has seen EU block exemption regulations carried forward into UK law, there has been huge market consolidation,” Parker says commenting on the consultation. “The pandemic highlighted and accelerated this development, and contributed to dreadful service levels and hugely inflated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers.
The market conditions have changed significantly since last year when BIFA were pressing for this review, however, the potential for issues resulting from the carrier’s vertical integration of their operations remained, Parker stresses.
Photo credits @ Flickr/ Dave via CC BY-NC-SA 2.0