Reed Smith In-depth

Key takeaways

  • The Consortia Block Exemption Regulation (CBER), introduced in 1995, renewed in 2014 and 2020, provides for a specific exemption allowing shipping liner companies to form consortia or operate joint services as well as share vessels and port facilities, under certain conditions
  • As of 25 April 2024, after respective consultations, both the European Commission (Commission) and the UK Competition and Markets Authority (CMA) have decided not to renew the CBER, instead putting forward the Specialisation Block Exemption Regulation (SBER) and Specialisation Agreements Block Exemption Order (SABEO) as suitable alternatives for their respective jurisdictions
  • The rationale behind and consistency in both the Commission’s and CMA’s decision to let the CBER expire are debatable, given the lack of significant changes in market conditions and the benefits of the CBER for carriers and users. To consider the SBER as a replacement would not reflect the specific characteristics and challenges of the liner shipping sector, nor would it provide clear guidance on how to apply the regulation to service providers
  • The discrepancy between the UK and EU interpretations of the term ‘joint distribution’ in the context of the SBER and the SABEO may lead to greater confusion for businesses already struggling to navigate the inevitable changes resulting from this new development
  • The expiry of the CBER will have negative consequences for the liner shipping industry, including greater legal uncertainty, increased compliance costs and reduced competition, innovation and sustainability as well as possibly discourage investment in the sector due to ambiguity about the future

Authors: Marjorie C. Holmes Emma Weeden Vaibhav Adlakha Charles Sauvage Lucy M. Demetriou, Matthew Barrett


Whether the CBER is fit for purpose has always been an area of contention. However, its contribution to shaping practice within the liner shipping industry cannot be underestimated. Therefore, until now, competition authorities have advocated for it to be retained.

This article briefly assesses the influence of the CBER on the liner shipping industry before exploring the consequences of its imminent expiry. It further discusses whether the SBER is an adequate replacement and reflects that the abandoning of the CBER will lead to considerable uncertainty within the industry.

The influence of the CBER on liner shipping and the consequences of its imminent expiry

The CBER, introduced in 1995, provides for a specific exemption allowing liner shipping companies to form consortia or operate joint services to carry cargo as well as share vessels and port facilities, under certain conditions. During recent renewals in 2014 and 2020, the Commission concluded that the CBER was fit for purpose, as it generated efficiency gains for carriers and benefits for users, such as the improved frequency, quality and reliability of services, as well as environmental efficiencies. Evidence also showed low freight costs and no significant adverse impacts. In view of this and together with the legal certainty the CBER offered, renewal was granted.