The Minister for Trade and Industry (Trade) has extended the 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 (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. (More details on the BEO and LSAs are in the Annex.)
The Competition Commission of Singapore (“CCS”) notes 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.
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.