Historic Decision Brings Container Shipping Into 21st Century

25th September 2006

FTA has greeted the decision by European Competitiveness Ministers to repeal the Block Exemption from restrictive trading practices for container shipping lines as the dawn of a new era in maritime transport. The decision means that shipping lines will need to end their long-standing practices of price-fixing and capacity management and submit to the normal disciplines of EU competition rules.

FTA has fought a long-running campaign to bring about the repeal of the Block Exemption that allows shipping conferences to set a tariff price for container shipments and to regulate the entry of new carriers into the market, so restricting competition and innovation in service development.

Chris Welsh, FTA's General Manager - Campaigns, who has led this campaign for FTA since its inception in 1992, said, 'This is a landmark day for the container shipping industry - it is the day when the customer's voice is finally allowed to be heard. We have been leading the campaign to repeal the Block Exemption since 1992 when we first took legal action against the Trans Atlantic Agreement (TAA) and latterly the Trans Atlantic Conference Accord (TACA).

'Along with our counterpart organisations in France and Sweden and more recently with the European Shippers' Council, we helped secure action in the European Courts in 1999 for illegal cartel practices, paving the way for the historic political settlement of the conference issue once and for all that has been announced today.'

From 2008 container shipping lines operating into and out of EU ports will need to conform to the competition rules that are imposed on almost all other commercial entities in Europe and respect the rights of their customers to confidential contracts and end their practices of sharing pricing information. It has been an anomaly that shippers and cargo owners have not had access to these rights under EU law for so long. Today's decision by the Competitiveness Council restores that balance and we now enter a new era of dialogue between shippers and carriers.

In practice this will mean far greater scope for shippers to negotiate their own terms with shipping lines and FTA has anticipated this new trading environment by compiling a guide to negotiating contract terms that was launched last week and is available to FTA members.