The cancellation of the EU's "EU General Exemption Regulation" CBER will increase market uncertainty

Source: 5688.cn

The cancellation of the Alliance Overall Exemption Regulations (CBER), although providing a 30% threshold for continuing to operate the alliance, has made liner operators susceptible to the impact of a blank interpretation of the rules.

Lars Jensen, founding CEO of Vespucci Maritime, a shipping consulting company, made this point in his latest review for the Baltic Exchange.

He said, "Canceling CBER will not prohibit the use of consortia. What is shrouded in uncertainty is the legal framework, as the EU ruling reveals significant differences in the interpretation of the rules

CBER is applicable to consortia with a market share below 30%, that is, as long as the market share is below 30%, there is no unfair restriction of competition by the consortium.

This makes it entirely legal for a consortium to have a market share of over 30% without excessively restricting competition, although it may be subject to investigation into whether competition is excessively restricted.

Jensen pointed out that: Strangely, the working documents of the ruling state that 30 out of 43 consortia have a market share of over 30%, so these 30 consortia are not protected by CBER. Therefore, legally speaking, they have not changed anything. However, this raises the question of why carriers lobby to retain a regulation they do not apply, why shippers lobby CBER to leave, and create a more competitive environment if this regulation has already been implemented Not applicable anymore.

This is likely to lead to a rearrangement of existing VSA and alliance arrangements. Operators will still use these arrangements for cooperation, but the constellation may change, so the network may also change in the spring of 2024. While dealing with blank navigation and idle excess tonnage, reaching agreement on a new network and implementing it becomes very difficult, and the risk of overcapacity will continue to exist until it is controlled

Jensen believes that this will make it difficult to predict when liner operators will stop shipping to manage the long-term excess tonnage expected to continue until 2024.

He believes that although the idle fleet is growing, currently accounting for 4%, so far, blank navigation is insufficient to meet demand. The scrapping has not decreased much, as the demolition this year has only resulted in less than 1% of the fleet being eliminated.

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