News / The end of the CBER may restore trust between shippers and carriers

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“What we are really hoping for now is that some trust can be re-established between shippers and shipping lines,” Global Shippers Forum director James Hookham told The Loadstar this week.

He was reflecting on last week’s decision from the EC not to renew liner shipping’s controversial Consortia Block Exemption Regulation (CBER).

“It was very important that the commission looked at how it [the CBER] was operating during a very defined period – the Covid era,” he said.

“The thing I noted most from the Covid experience was the decline in trust between shippers and their carriers, and a belief by many shippers that carrier ability to co-operate was somehow acting against their interests.

“This was only compounded when several competition regulators issued warnings to carriers that they were being closely watched.

“That is not to suggest there was any collusion among lines, but the fact is that many shippers simply didn’t believe they could trust what they were being told by carriers,” he explained.

The EC considered CBER renewal on how it worked between 2020 and 2023, which had left some experts scratching their heads – Vespucci Maritime’s Lars Jensen revealed his puzzlement when he was interviewed on The Loadstar Podcast last week.

He said: “If you want to do something structural with an industry, it seems kind of silly to base it on analysis of the most extreme period the industry has ever seen.

“This was a period where freight rates jumped to levels never thought of before, through absolutely no fault of the carriers. It was a period where you saw service levels, in terms of schedule reliability, decline more rapidly and faster than ever seen before, driven by pandemic disruptions, Suez Canal blockages and what have you.

“So, I find that when you make structural changes to an industry, and you base it on analysis that only takes the most extreme period into account, I don’t think that is the right way – but here we are,” Mr Jensen said.

However, Mr Hookham explained that, as rates skyrocketed and capacity vanished at the height of the supply chain crisis, “all of these things were being traced back to the lines’ ability to talk to each other”, and he added: “And it appeared that people were being denied their right to fair competition.

“Permitted cooperation between competing companies is nothing new, and non-renewal of the CBER is an opportunity to refresh and revise the competition rules liner shipping works under – and to bring them into line with the regulations that all other sectors of industry have to comply with,” he said.

And while Mr Hookham recognised that the CBER had become something of a signature issue for the GSF, he said there were other subjects now – particularly decarbonisation and digitalisation – of greater long-term importance, and that are in shippers’ and carriers’ mutual interests to progress.

“There is a lot that larger shippers can offer the shipping industry as it confronts its own version of the decarbonisation challenge; for example, many shippers have been operating in a carbon trading scheme environment for years.

“The competition issue hampered these debates, but now the elephant is leaving the room there is so much more to be gained by working together,” said Mr Hookham.