The Singapore Shipping Association (SSA) has welcomed the decision by Singapore’s Minister for Trade and Industry to extend the Competition (Block Exemption for Liner Shipping Agreements) Order (BEO) for another five years until 31 December 2020. This is in line with a recommendation made to the Ministry by the Competition Commission of Singapore (CCS).
The BEO, which was first issued in July 2006, exempts a category of liner shipping agreements from the prohibition against anti-competitive agreements under section 34 of the Competition Act. These include non-mandatory adherence to tariffs, and allowing member liner operators to enter into individual confidential contracts and offer their own service arrangements. It was extended in 2010 for five years until 31 December 2015.
Paying tribute to the “many members who had worked so constructively and collaboratively with the SSA Secretariat to achieve this positive result”, Mr. Esben Poulsson, President of SSA, said any help that could be given to an industry as important to free trade and globalisation as container shipping is, must be welcomed.
He said: “To me it is self-evident that the dismal state of the global container market and the extremely low box rates being paid, clearly prove that whatever help the industry can be given at this point will be most welcome. These historically low rates illustrate just how competitive the market is and highlight how any talk of this measure being ‘anti-competitive’, is just plain wrong.”
In making its recommendation, the CCS received five submissions in response to the public consultation. Four of the respondents were supportive of the proposed extension of the BEO, while one respondent was not in favour.
The CCS carefully considered the changes in the international regulatory environment in its review and noted that antitrust exemptions for liner shipping agreements generally remain the regulatory norm worldwide. CCS also took into consideration, amongst other factors, the size of the Singapore economy, that Singapore is not a major port of origin or destination, and that a very large proportion of Singapore’s container cargo throughput involves transhipment.
As a result, it assessed that liner shipping agreements, which fulfill the requirements set out in the BEO, continue to meet the net economic benefit criteria and qualify for exemption from the prohibition against anti-competitive agreements.
About the Singapore Shipping Association (SSA)
The Singapore Shipping Association (SSA) represents a wide spectrum of shipping companies and other businesses allied to the shipping industry. It is a national trade association formed in 1985 to serve and promote the interests of its members and to enhance the competitiveness of Singapore as an International Maritime Centre.
To achieve its objectives, the SSA plays an active role in promoting the interests of shipping in Singapore and internationally, and co-operates with other regional and international shipping organisations to protect the marine environment and promote freedom and safety at sea. Currently SSA represents some 470 member companies; comprising shipowners and operators, ship managers, ship agents and other ancillary companies such as shipbrokers, classification societies, marine insurers, bunker suppliers, maritime lawyers, and shipping bankers amongst others.