The British International Freight Association welcomes the news of the launch by the Competition & Markets Authority (CMA) of a public consultation on the latter’s proposed recommendation to UK government regarding the retained Liner Shipping Consortia Block Exemption Regulation.
However, BIFA Director General, Steve Parker, says that whilst the trade association will be encouraging its members that are operational in the deep-sea container market to read the proposal document, and share their responses; it hopes that trade has not been presented with a fait accompli.
Parker says: “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.”
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.
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 adds: “BIFA, and its members, are not anti-shipping line. The association wants to ensure that there is a suitable balance between them as carriers, and our 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.
“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 we were pressing for this review, however, the potential for issues resulting from the carrier’s vertical integration of their operations remain.”
BIFA is pleased to see the CMA consultation taking place, as it will give all parties the opportunity to make comments, good or bad, about the current state of the container shipping industry.