World Maritime News (65)

Carriers lose fight to keep consortia block exemption regulation

The European Commission has finally brought the axe down on the consortia block exemption regulation that had allowed container lines to avoid elements of antitrust law after carriers failed to persuade the regulator to extend the rule. The decision comes after a long-running review of the regulation, which was last extended for a four-year term in 2020 and published its staff working document summarizing its evaluation findings.

The ripples from Europe’s decision are being felt in the UK and Australia, two other jurisdictions where container shipping’s antitrust exemption is under review. “The EC has taken a sensible decision, and the UK government should follow suit to ensure that shipping lines in the future will be subject to competition law,” Steve Parker, director-general of the British International Freight Association (BIFA), said in a statement. The UK’s block exemption for liner shipping also expires in April 2024. In Australia, a decision on whether carriers will continue to enjoy immunity from antitrust regulations is expected soon. An eight-month probe into Australia’s maritime industry was launched by the Productivity Commission late last year after complaints by shippers about soaring freight rates and ancillary fees, together with years of industrial unrest among dock workers. In the US, a House bill that would allow the Federal Maritime Commission to block an agreement immediately rather than having to seek a federal injunction was introduced in March. But the Transportation and Infrastructure subcommittee hasn’t voted on the legislation. At the same time, it has pushed other legislation seeking to amend the Ocean Shipping Reform Act of 2002 to the House floor for a final vote.


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Fears of unintended consequences from removal of block exemption

The European Commission’s move to allow the consortia block exemption regulation to expire resolves a long-running dispute between carriers and their shipper and forwarder customers. But it remains to be seen whether the result will be as positive for shippers as hoped or whether the law of unintended consequences will apply.


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CMA CGM releases ETS surcharge estimate

CMA CGM has become just the third container line to give indicative surcharge pricing ahead of the introduction of the European Union Emissions Trading System next January. The difficulty for carriers is that they need to apply surcharges when cargo is transported, but the actual cost of the allowance they need to buy will not be known until much later. For example, emissions accrued in 2024 do not need to be paid for until September 2025, with the actual price only known then. CMA CGM said the total surcharge amount will be announced in mid-November and may be reviewed every quarter, depending on the updated version of the EU ETS regulation and the market value of carbon allowances.


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Container imbalances remain a key issue for box trade

Returning empties to major export markets costs up to $16bn a year. But with manufacturing still focused on Asia, there are few hopes of rebalancing the market. Geopolitics and changing trading patterns are leading to “woeful” container imbalances as boxes end up in the wrong markets with little incentive to return them to where they are needed. The problem was particularly acute during the pandemic when supply chain disruptions in import markets and high container head-haul freight rates made it challenging to return empties to export markets in Asia. But despite the reopening of trade and the easing of congestion, box imbalances continue to plague the industry.


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Maersk and Ocean Network Express planning more boxship orders

Maersk and Ocean Network Express appear to be considering more orders for new containership buildings as they seek to boost their alternative-fuel vessel fleets. Maersk is mulling up to 15 ships of 3,500 teu capacity, which could be ordered via a tender process. Several experienced shipyards in China, Japan, and South Korea are understood to be in the running for the new order. Maersk declined to comment on the rumored tender, however. Meanwhile, Ocean Network Express is understood to be in the process of ordering a further 10 neo-panamax containerships. In May 2022 and March this year, the company ordered 20 vessels of this capacity at South Korean and Japanese shipyards. ONE has requested quotes for both conventional-fuel and dual-fuel methanol propulsion vessels of 13,000 teu. Should the company opt for methanol-fuel specification vessels, they will be the first such ships to have been ordered by ONE, the world’s sixth-largest operator of containerships.


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Equipment manufacturers look outside the box

China’s container equipment manufacturers are turning to special containers as demand for traditional 20- and 40-foot units continues declining. In the wake of the downturn, manufacturers were turning to specialist units, such as open-tops and flat racks, which were, to some extent, seeing stronger demand. A growing number of older specialist units need to be replaced, and demand is growing as more breakbulk and project cargo moves to containers, particularly cargo associated with the renewable energy industries. But while maritime equipment demand was low, Drewry said developments outside maritime provided manufacturers the biggest opportunities. “In particular, it is the growing demand globally for energy storage units as wind and solar farms provide a greater share of the world’s electricity,” Drewry senior analyst Fossey said. “This market is seen as being more stable and predictable than the volatile container shipping industry.”


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