Singapore extends block exemption for liner shipping agreements till 2020

THE Ministry of Trade and Industry (MTI) of Singapore has announced on Wednesday its decision to extend the block exemption order (BEO) for liner shipping agreements (LSAs) for another five years until Dec 31, 2020.

This follows a public consultation by the Competition Commission of Singapore (CCS) and its subsequent recommendation to renew the existing exemption regime.

The BEO, which was issued in 2006 and extended in 2010, is due to expire on Dec 31, 2015. It exempts liner shipping agreements from the prohibition against anti-competitive agreements under section 34 of the Competition Act (Cap 50B), provided certain conditions and obligations are fulfilled. These include non-mandatory adherence to tariffs, and allowing member liner operators to enter into individual confidential contracts and offer their own service arrangements.

CCS has noted that transhipment makes up a very large proportion of Singapore container volumes. It has also assessed that the high degree of connectivity and availability of liner shipping services in Singapore benefits Singapore's importers and exporters beyond what might ordinarily be expected if the port depended only on exports and imports.

"It is internationally recognised that LSAs, which facilitate the sharing of vessels among liners, enable more frequent services and cost savings for liners. They may also enable a group of smaller liners to provide services that compete with larger liners. Antitrust exemptions for LSAs generally remain the regulatory norm worldwide," MTI added in a release.