Singapore’s Ministry of Trade and Industry (MTI) has extended Competition Block Exemption for Liner Shipping Agreements Order (BEO) for another five years until 31 December 2020.
The BEO exempts liner shipping agreements (LSAs) from the prohibition against anti-competitive agreements under section 34 of the Competition Act, 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.
The Competition Commission of Singapore (CCS) noted that transhipment makes up a very large proportion of Singapore container volumes, and has 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.
The extension comes following a consultation process initiated in May this year when CCS sought views on the possible impact of the proposal on the Singapore economy, in particular on players in the maritime industry such as shippers, port operators, liners, and logistics service providers.
During the review, Singapore National Shippers’ Council (SNSC) had said it would request from the Competition Commission to drop the BEO from the Competition Act amid worries over the effects on shippers of the ongoing trend that has seen formation of major carrier alliances.
The BEO, which was issued in 2006 and extended in 2010, is due to expire on 31 December 2015.