Whither BER?
The European Union’s Block Exemption Regulation (BER) currently in place allows shipping lines on certain conditions to enter into cooperation agreements (consortia). The first BER was adopted in 1995 and has since been prolonged and amended four times. The Consortia BER will expire on April 25, 2020, and the EU’s proposed evaluation is expected to be concluded sometime in 2019.
While ocean carriers’ obviously wish to see the BER extended, there have been concerted push back from European shippers. The EU Commission had invited all stakeholders to submit their views before Dec. 20, 2018. The European Shippers’ Council (ESC) has expressed its displeasure with the ocean carrier alliance’ service reliability and its impact on supply chains.
Would reliability and service choice improve if alliances ceased and services reverted back to individual carrier offerings?
The withdrawal of the BER would exacerbate the delicate financial standing of some carriers and pave the way for further liner consolidation. Such developments would have global implications and as such BER should not be perceived as a purely EU issue.
Integration of fleets, the alignment of ports of call and terminals and the creation of cohesive operating units presents a greater challenge in this era of ultra-large container ships. A mechanism for a more practical and operationally focused dialogue between carrier alliances and shipper associations should be established to find mutually acceptable solutions to issues impacting the supply chain.
Allowing BER to expire would be a costly mistake — negatively impacting both shippers and carriers.
May common sense prevail!