Carrier Alliances Threatened By EU Announcement

October 12, 2023

Carrier Alliances Threatened By EU Announcement

The future of carrier alliances have come under threat this week after an announcement by the European Commission (EC) regarding existing legislation.

The Consortia Block Exemption Regulation (CBER), which enables carriers to operate within alliances, will not be renewed when the existing exemption ends in April 2024.

CBER was introduced in 2009 and followed the break up of the old conference system, it was subsequently renewed in both 2014 and 2016. The conference system it replaced allowed carriers to fix rates, often by commodity, and was felt to breach monopoly rules.

The EC concluded that CBER was ‘not fit for its original purpose any more, as its does not fulfil the criteria of effectiveness, efficiency and EU added value’.

The report also made reference to the situation that has followed the pandemic, where a massive upward swing in ocean freight rates has been followed by an equally large swing downwards. It stated ‘its effectiveness and efficiency during this unprecedented period was at best, limited’.

Just where this leaves carrier alliances is unclear right now. Vessel sharing will inevitably continue as it is a necessity for most carriers, but how the current alliances shape themselves over the coming months will be interesting to see.

We already know that the 2M alliance is in the process of breaking up, with Maersk and MSC going their own way in 2025.

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