EU to permit liner shipping consortia for another five years

EU to permit liner shipping consortia for another five yearsBrussels  - The European Union is to allow groups of shipping companies to schedule joint cargo services until at least 2015, even though this might normally break the bloc's rules on fair competition, officials in Brussels said Monday.

The decision offers "legal certainty and ... ensures the regularity of service between ports and ensures that more ports are served than would otherwise be the case," European Commission spokesman Jonathan Todd said.

Such a deal would mean benefits for clients of shipping companies, even if it entrenched existing deals that make it harder for new companies to offer services on a route.

Liner shipping consortia are arrangements under which groups of shipping companies share out cargo space on scheduled runs between specific ports. This allows each company to offer services to more destinations than it would be able to handle alone.

Such practice would normally be illegal under EU rules, which say that companies are not allowed to share out markets or make it harder for rivals to offer competing services.

The commission oversees those rules.

But the laws also allow for so-called "block exemptions" which free companies in specified sectors from some of the competition requirements. Such exemptions are granted when the commission judges that consumers would benefit more from cooperation between companies than they would gain if the collusion were stopped.

The current exemption does not allow shipping companies to fix prices, Todd stressed.

The EU originally brought in a block exemption for shipping consortia in 1995, extending it in 2000 and 2005.

Monday's decision extends it for a further five years.(dpa)