Singapore’s Competition and Consumer Commission (CCCS) is seeking public feedback on its proposed recommendation to the government to extend the block exemption order for liner shipping agreements (LSA).
The current BEO, which expires on 31 December 2024, exempts certain types of LSAs from section 34 of Singapore’s Competition Act, subject to certain conditions and obligations.
These include vessel sharing agreements (VSA) for liner shipping services and price discussion agreements (PDA) for feeder services.
The LSA BEO was first introduced in Singapore in 2006 on the recommendation of the CCCS and it is the only block exemption order in force in Singapore.
CCCS proposes renewing the competition order for a further five years until 31 December 2029 because it would generate a “net economic benefit” for Singapore.
“The vessel sharing agreements for liner shipping services improve the global connectivity of Singapore’s port and support its status as a transhipment hub,” the CCCS said.
“They also enhance competition among liners by lowering barriers to entry for smaller liners to provide services on trade routes and at frequencies that they would otherwise not be able to provide on their own due to lack of scale.
“Further, [they] bring about environmental benefits by enabling liners to share, utilise and deploy larger vessels that are more environmentally friendly,” the CCCS added.
Singapore’s competition authority also said that price discussion agreements for feeder services “remain relevant” for some feeders’ businesses.
“Being able to participate in such PDAs attracts feeders to base their headquarters and operations in Singapore and connect their services through Singapore,” the CCCS said.
“Feeders, in turn, attract and anchor main lines to Singapore, thus expanding Singapore’s shipping network to support its transhipment hub.”
The CCCS noted that anti-competitive effects from the use of such agreements “appear to be limited”.
