27/1/2021

The EU has informed European shippers that the container lines' current price increases are not enough to launch an investigation into competition conditions. However, the EU would like to discuss the market situation with competition authorities in the US and China, says European Shippers' Council.

The EU Commission's competition authority has stated they will not launch an investigation into whether competition with soaring freight rates and pronounced shortage of containers. Shippers and forwarders gathered in a European Freight Forwarders Association, CLECAT, and European Shippers' Council, ESC, acknowledge this in a press release following a recent online meeting with the EU's Directorate General for Competition. Read the full press release here.

The meeting took place after ESC and CLECAT called on the Commission to intervene against the container lines due to the overheated market seen. According to the press release, however, the EU told the two associations that there are only two circumstances which could trigger an investigation of the competition conditions by the EU Commission.

The meeting took place after ESC and CLECAT called on the Commission to intervene against the container lines due to the overheated market seen. According to the press release, however, the EU told the two associations that there are only two circumstances which could trigger an investigation of the competition conditions by the EU Commission.

First, the two associations could submit a formal, well-documented complaint about the competition conditions. Second, the associations await the EU's review of the Block Exemption Regulation, BER, for container lines. BER is a special rule that allows the container shipping lines' alliances to coordinate their network and use slots on each other's ships, as long as they have a market share of less than 30 percent.

This much-discussed regulation [BER] was extended last year until 2024. "At the same time, the Commission indicated that price hikes as such are not seen as a justification to start an investigation," writes ESC in the press release.

According to ESC, the EU is fully aware of the current market situation, including the recent price hikes, but the Commission's view is that this is mainly due to issues relating to demand triggered by the COVID-19 crisis.

 

Source: SHIPPINGWATCH, ESC

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