Last week. Hong Kong’s Competition Commission decided to renew the block exemption order for vessel sharing agreements between liner shipping companies. The decision as the liner sector has been subject to scrutiny from the US to China as freight rates have risen to astronomical levels since the pandemic outbreak in 2020, hitting record highs in 2022.
Over the past year, the Commission conducted a review of the order, which comprised an initial consultation, engagement with stakeholders and counterpart competition agencies, as well as collection of data and market intelligence from an independent industry expert. Following the review, the Commission published a proposal to renew the Order in May 2022and sought representations from interested parties in accordance with section 20 of the Ordinance.
The Commission concluded that the relevant activities of the VSAs continue to meet the requirements of the efficiency exclusion. It also said the continuation of the order to be merited and effective. The Commission will renew the Order for a duration of four years, until 8 August 2026.
Previously, the order had an initial duration of five years, this time it is only being renewed for a further four years. “This is in light of the continuing impact of the COVID-19 pandemic on the prevailing market conditions which warrants a review of the Order within a shorter time frame. The Commission will commence a review in three years’ time,” the Commission explained.
Roberto Giannetta, managing director of the Hong Kong Liner Shipping Association, said the association asked for the agreement to be extended for five years. Although the cut to four years “is not perfectly in line with our recommendation, we confirmed to them our acceptance of their conclusions,”
Source:
Hong Kong Maritime Hub
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