The healthy functioning of the maritime logistics chain is at risk
representing users of liner shipping services and service providers of the maritime logistics chain (hereafter, the associations) jointly object to the prolongation of the Consortia Block Exemption Regulation (CBER) on the grounds advanced in the Commission Staff Working Document Report from 20 November 2019 (the SWD). The associations believe the Commission has failed to demonstrate that the continuation of the CBER would benefit transportation users and service providers, i.e. consumers.
The EU’s Consortia Block Exemption Regulation for liner shipping exists since 1995 and was revised in 2010. Since then, it has been renewed, without modifications, every five years. The Commission’s proposal – to which the associations strongly object - is to once more renew the BER without modifications.
Not only has the Commission largely dismissed the views of the users, operators and service providers in the supply chain, who all responded to the original consultation in 2018; the associations all share the view that there are many legal flaws in the arguments put forward by the Commission. These flaws relate to many issues - missing data, one-sided assumptions on efficiency gains disregarding non-rate related parameters, lack of a proper definition of relevant geographic markets to assess market shares and a complete failure to identify remaining benefits to users if the CBER would be continued.
A profound legal analysis of the SWD has demonstrated that:
1. The Commission has not obtained the relevant price and market share data and information readily available from the carriers – benefiting from the CBER - to enable it to review the operation of the CBER in the light of the major developments in the industry since the last review in 2014.
The Commission concedes it is difficult to estimate the exact market shares of consortia due to lack of accurate data on transported volumes and the complex network of cross-membership between consortia. This amounts to an admission that the terms of the CBER are unenforceable as the Commission cannot calculate precisely whether a consortium falls within the market share threshold.
2. The Commission has not recognised that a BER is the application of competition law by legislation of general application to a category of defined agreements but is not a self-standing law in the same way as standard EU legislation subject to the EU Better Regulation policy and the related Evaluation process.
3. The Commission has not assessed the five Evaluation criteria accurately and in a balanced way, in particular because of the failure to obtain the available relevant data and mainly by ignoring important changes in the liner shipping market since 2014. Without adequate explanation, the SWD has wrongly excluded Alliances from the evaluation of the CBER. Alliances have through investment in ULCV’s - largely changed the economics of international liner shipping, which in turn has changed cost structures for logistics and infrastructure providers. It is disturbing that the Commission SWD concludes that Alliances are irrelevant to its evaluation of the CBER because two of the Alliances fall outside the 30% market share threshold on certain trades.
The associations consider it equally frustrating that the Evaluation criteria are completely biased towards the interest of the carriers. The BER is said to provide carriers with legal certainty as without the BER, consortia would need to carry out self-assessments to ensure they meet the EU’s general competition regulation. Yet an unmodified BER may not provide this legal certainty, as it is unclear which consortia are still covered by it: it applies only to consortia with a market share below 30%, which is difficult to monitor in practice as outlined above. The reason is that the Commission uses the “combined market share”, which takes the cross-linkages between consortia into account. In doing so the Commission has judged the benefits of the CBER on its ability to make life easier for carriers and administratively simpler for the Commission, fully ignoring the effect this has on European importers and exporters trading in the global marketplace.
4. The Commission has not recognised, despite the evidence provided in the relevant ITF reports, that the reduced possibility of costs rationalisation has resulted in a continuous deterioration in the quality of service and in an abuse of power due to their dominant role towards service providers within the logistic chain and therefore an erosion rather than increase in economic benefits to share with users and consumers.
The SWD fails to address the fundamental question as to whether the CBER was effective in increasing the quality of service for users, maintaining an adequate level of choice and sufficient options in terms of frequency of sailings and ports called. The view of the associations, based on hard facts and evidence, is that quality and choice have decreased over the last years. The Commission discounted the necessarily anecdotal evidence supplied by shippers and other users.
5. The Commission has not analysed the impact of liner shipping consortia on ports operations and landside transportation. The landscape of the liner shipping industry has changed in the sense carriers do not limit their services to port-to-port services but door-to-door; they also exchange data on services which relate to the port and land side which is made easier with developments in the area of big data and business intelligence and analytics – all of this not available to the liner shipping industry at the time of previous reviews of the BER.
Market changes, including market definition, recently anticipated by Commission Senior Vice-President Vestager resulting from globalisation and digitalisation would require the carriers to provide evidence relating to the dominant role of end-to-end services and future market developments, such as connected digital information services.
In view of these legal flaws, and
- Considering the CBER is a disproportionate and excessively liberal concession from normal competition rules;
- Considering the absence of clear benefits for the associations, as demonstrated in the various submissions from the associations, jointly and individually, and the lack of enforceability of the CBER due to missing data, the proposed four-year extension is problematic;
- Considering that during these four years, the current CBER regime could cause serious and irreparable harm to the European maritime logistics sector.
The associations urge the Commission not to renew the CBER for four years and to conduct a proper objective evaluation of the Consortia BER within the coming twelve months. The additional time should be used to collect all the missing information highlighted above.
The associations, who are exploring all possible legal options, believe that it is the role of the European Commission to guarantee a true level playing field and a healthy functioning of the maritime logistics chain to the benefit of Europe’s consumers. The associations have requested a meeting with Commissioner Vestager and look forward to receiving a positive reply and the opportunity, as it has been the case for shipping lines, to expose their concerns.
13.01.2020 – HLSG Cooperation Group on Places of Refuge – Brussels
On 13 January 2020, FEPORT attended to the 9th HLSG Expert Sub-Group “Cooperation Group on Plces of Refuge” (PoR Group).
During the meeting, the PoR Group discussed the Joint IMO Submission regarding the preliminary draft text of the revised Guidelines on places of refuge for ships in need of assistance (resolution A.949(23)).
This document was proposed in order to make the Guidelines clearer and more operational for all parties involved in the assisntace of a ship seeking a place of refuge.
During the meeting, the Spanish Exercise Director presented the 4th Table Top Exercise (TTX), that took place on 2-3 October 2019.
Hosted by Spain, the exercise concerned a large container vessel on fire and allowed participants to draw three main (lessons) conclusions:
- the mis-declaration of hazmats constitutes a major hazard to the safety of container carriers;
- the Class ERS proved to be a keypoint in the decision making process;
- the Operational character of the Guidelines was confirmed.
The TTX provided an excellent opportunity to learn from each other.
15.01.2020 – Workshop on EMSWe dataset and business processes – Brussels
On the 15th of January, FEPORT Secretary-General attended a workshop on the EMSWe dataset and underlying business processes, together with ECASBA and FONASBA representing the shipping agents.
The European Maritime Single Window environment, which entered into force in July 2019, aims to reduce the administrative burden on ships calling at EU ports by creating one maximum EU dataset, so ships have to report information only once. For FEPORT, EMSWe related discussions are very relevant to follow, as the EMSWe regulation also contains customs related reporting obligations and the regulation also alludes to the sharing of information regarding estimated times of arrival and departure.
The workshop was organized by DG MOVE, European Maritime Safety Agency EMSA and KPMG. To advise the European Commission on the dataset stemming from the reporting obligations, KPMG is conducting a study to describe the data submission process during a port call.
16-17.01.2020 – Work on standardisation in progress within TIC 4.0 – Antwerp
The Terminal Industry Committee (TIC 4.0), which gathers 20 members, representing many leading terminal operators, well-known port equipment manufacturers and solutions providers, has been formally registered in Brussels on the 19th of Nov 2019 and granted legal personality by Royal Decree on December 20th, 2019. TIC 4.0 members have gathered on January 16th, 2020 for a plenary meeting at PSA offices in Antwerp.
The Executive Council of TIC 4.0 gathers 7 members who represent FEPORT, PEMA as well as major corporations.
Mr Boris Wenzel, Managing Director of Terminal Link, is the President of TIC 4.0 and Mr Norbert Klettner, Managing Director of RBS-EMEA, has been elected as the Vice-President.
Mr Frank Kho, an industry veteran who worked for terminal operators as well as equipment manufacturers, has been appointed as CEO of TIC 4.0.
Mrs Lamia Kerdjoudj-Belkaid, Secretary General of FEPORT, and Mr Ottonel Popesco, President of PEMA, represent the two organizations who have politically supported the establishment of TIC 4.0.
The other members of the Executive Council are Mr Stephan Gosiau, Technical Director of PSA, and Mr Jari Hamalainen, Director Automation at Kalmar.
Besides the 20 members of TIC 4.0, who are Hyster-Yale, Kalmar, KoneCranes, Kuenz, Liebherr, NAVIS, Phoenix Lighting, RBS, SICK, TBA, TMEIC, ZPMC, APMT, Bollore, Eurogate, Port of Koper, PSA, Terminal Link, MMC Ports and Yilport, several other organizations have expressed their interest to join this unique initiative.
The mission of TIC 4.0 is to promote, define and adopt standards that will enable cargo-handling industry to embrace the 4th Industrial Revolution.
A closer interaction between terminals and manufacturers with the objective of the elaboration of industry standards will favour the development of Internet of Things, Artificial Intelligence and further technological innovations in the port sector. Innovation will also be the best means to support sustainable and efficient port operations.
The initial objectives of TIC 4.0 are as follows:
- Define and agree on a common semantics and definitions among the companies involved in the cargo handling industry, both terminal operators and port solution providers.
- Develop communication protocols and frameworks that will be adopted by the port industry players for seamless data communication regardless the manufacturer or type of equipment/machine.
- Facilitate the inter-operability of different information sub-systems of a cargo handling facility.
- Promote the adoption of selected existing standards and those developed by TIC 4.0 by the sector.
The work on standards and definitions will now continue. All members will be active in one or more working groups to reflect upon specific definitions.
“I really feel that both energy and commitment prevail among TIC 4.0 members to achieve the goals we have set. I believe that to achieve these goals, the cooperation between terminal operators and solution providers is a great critical success factor.” said Frank Kho, TIC 4.0 CEO.
“TIC 4.0 members all believe that the work on standardization is of utmost importance for our industry in the context of increased digitalization of the supply chain. It will also enable the adoption of innovative processes and solutions.” added Mr Boris Wenzel, President of TIC 4.0.
If you are interested to join TIC 4.0 or to have more information, please contact:
Mr Frank Kho, CEO:
21.01.2020 – Presentation of the Croatian Presidency programme to the TRAN Committee – Brussels
On January 21, 2020, a delegation form the Croatioan Presidency gave a presentation on the Council Presidency’s programme to the TRAN Committee.
The Croatian State Secretary, Ministry of the Sea, Transport and Infrastructure, Mr Josip Bilaver, announced that, regarding transport priorities, the Croatian presidency’s has two main objectives. The first goal is the improvement and completion of the trans-European transport network. The second concerns the sustainability and the connectivity of a sustainable shipping sector. An informal Council of ministers will take place on March 11, touching upon topics such as environmental protection, seamen and digitisation.
21.01.2020 – DINA Expert Group Meeting – Brussels
On the 21st of January, FEPORT attended the Digital Inland Navigation (DINA) Commission Expert Group, which took place at the Charlemagne building of the European Commission.
One important agenda item dealt with the positioning of the “inland community” towards the DTLF. This part of the discussion was let by the Inland Waterway Transport (IWT) Platform. The DTLF consists of various committees and subgroups which are of possible relevance to inland navigation and various members of DINA also participate in the DTLF discussions. The participants argued that the common voice of inland navigation in DTLF discussions would be much stronger if the various DINA members aligned their positions and spoke with one voice at the DTLF.
Another part of the discussions dealt with the “Digital Synergies Study” commissioned by DG MOVE. This study aims to facilitate the digitalisation of the inland waterway transport sector, mainly by identifying digital solutions that are used in other transport modes such as road, rail or maritime and assessing through feasibility studies whether these solutions could also work in inland navigation. One of the possibilities dealt with in this Digital Synergies Study is the possible extension of EMSWe to the inland waterway transport sector.
23.01.2020 – DTLF Meeting – Brussels
On January 23, FEPORT participated in the 4th meeting of the Digital Transport and Logistics (DTLF) Subgroup II (corridor freight information systems).
The DTLF is forum established by the European Commission that brings together stakeholders from different transport and logistics communities, from both the private and the public sector, with a view to build a common vision and road map for digital transport and logistics.
During the meeting, the participants were informed on the Subgroup II work development and on the progress concerning the federated platform building blocks, reporting from the SG2 Teams. Moreover, the attendees were updated on the coordination activities between the DTLF, FEDeRATED and FENIX.
During the second part of the meeting, stakeholders split into teams and had an interactive discussion within the respective SG2 Teams (“Plug & play”, “Technology independent services”, “Federation, network of platforms”, “Trusted, safe and secure”) to discuss the further steps to take.
23.01.2020 – Waterborne General Assembly – Brussels
On the 23rd of January, the Waterborne Community – consisting of stakeholders such as shipbuilders, port operators, shipowners, classification societies and research institutes – gathered for the Waterborne General Assembly.
During the Waterborne GA, much of the discussions dealt with the next steps in preparing the Co-Programmed partnership in the framework of Horizon Europe.
The Waterborne Partnership has been approved in October 2019 and FEPORT welcomed this development considering it as a good step towards not only the development of maritime technology solutions that will enable zero-emission shipping, but also as a means to foster green multi-modal transport solutions, improved data-sharing between parties throughout the (maritime) logistics chain and greener and more efficient port operations, among others through automation and digitalization.
If everything goes well, the Waterborne Partnership will enter into force by 1 January 2021. The budget has not yet been set and will depend on how much money will be allocated to Horizon Europe under the next EU Budget (2021-2027) and on how much money the Member States and Commission decide to allocate for Horizon Europe specifically.
To further elaborate on the Partnership, the Waterborne TP is currently developing a “Guidance Document” and a “Strategic Research and Innovation Agenda”. Both documents were extensively discussed during the Waterborne GA. During the meeting it was also frequently mentioned that an increased involvement of port stakeholders in the partnership was most welcome.
05.02.2020 Social Affairs Committee - Brussels
13.02.2020 Board of Directors - Brussels
18.03.2020 Customs and Logistics Committee - Brussels
01.04.2020 Port Policy Committee - Brussels
02.04.2020 Environment, Safety and Security Committee - Brussels
08.04.2020 Social Affairs Committee - Brussels
16.04.2020 Board of Directors - Brussels
07.05.2020 Customs and Logistics Committee - Brussels
04-05.06.2020 General Assembly - Hamburg
02.09.2020 Port Policy Committee - Brussels
09.09.2020 Social Affairs Committee - Brussels
10.09.2020 Environment, Safety and Security Committee - Brussels
17.09.2020 Board of Directors - Brussels
21.10.2020 Customs and Logistics Committee - Brussels
04.11.2020 Port Policy Committee - Brussels
05.11.2020 Environment, Safety and Security Committee - Brussels
12.11.2020 Social Affairs Committee - Brussels
18.11.2020 Board of Directors - Brussels
19.11.2020 FEPORT Sixth Annual Stakeholders’ Conference – Brussels
03.02.2020 ENVI Committee Meeting – Brussels
17-18.02.2020 ENVI Committee Meeting – Brussels
19-20.02.2020 TRAN Committee Meeting – Brussels
19-20.02.2020 EMPL Committee Meeting – Brussels
05.03.2020 ENVI Committee Meeting – Brussels
16-17.03.2020 TRAN Committee Meeting – Brussels
16-17.03.2020 EMPL Committee Meeting – Brussels
18-19.03.2020 ENVI Committee Meeting – Brussels
26.03.2020 EMPL Committee Meeting – Brussels
03-04.02.2020 Euromaritime – Marseille
19.02.2020 Social Dialogue for Ports Committee Meeting – Brussels
20-21.02.2020 International Maritime Law Institute Meeting – Malta
12.03.2020 TIC 4.0 Plenary Meeting – TBC
18-20.05.2020 ITS Europe Congress 2020 – Lisbon
24.06.2020 European Environmental Ports Conference – Rotterdam