S&B USA Concessions’ Post

Liners lose their European consortia block exemption It has finally happened. The European Commission today announced that liner shipping consortia will lose their exemption from EU antitrust rules when the current arrangement expires on 25 April next year, see https://lnkd.in/empG7c-w. Previous reviews of CBER (Consortia Block Exemption Regulation) stirred up long-standing grievances against carriers, but other than providing an opportunity to vent, they were ultimately renewed. This latest review occurred in even more febrile times with many politicians around the world looking to capitalise on the carrier bashing, which became a bigger sport in the wake of their extreme profits made during the pandemic. The big question now is whether the removal of the CBER will actually benefit shippers and generate more competition? In Drewry Shipping Consultants Ltd's view this development is likely to backfire on shippers. Firstly, there was no compelling case that carriers abused market power during the pandemic. Such was the extraordinary impact of Covid on supply chains that freight rates would have soared with or without the CBER. Secondly, the hoped-for increase in competition will be stymied by legal uncertainty and extra bureaucracy. Removing the block exemption will not bar carriers from forming alliances and vessel sharing agreements, but they might not by willing to expose themselves to potential legal action. Moreover, will smaller carriers be put off from participating in European markets with the greater administrative burden? By effectively coercing lines to operate independently, the logical conclusion is that each carrier will have to downsize their service portfolios in terms of frequency and connectivity. That would reduce, not increase, competition on a port-pair basis and push up freight rates. 

"In particular, the new Regulation on combatting late payments in commercial transactions tackles payment delays, an unfair practice that compromises the cash flow of SMEs and hampers the competitiveness and resilience of supply chains. The new rules will repeal the 2011 Directive on late payments and will replace it with a Regulation. The proposal introduces a stricter maximum payment limit of 30 days, eliminates ambiguities and addresses the legal gaps in the current Directive. The proposed text also ensures an automatic payment of accrued interest and compensation fees and introduces new enforcement and redress measures to protect companies against bad payers." https://lnkd.in/eJ2j3xua