Hong Kong has renewed a block exemption order for vessel-sharing agreements (VSAs) in the liner shipping industry for another four years.
The Hong Kong Competition Commission announced that the terms of the block exemption set out in 2017 were set to expire on August 8, 2022, but with the extension, it would remain in place until August 8, 2026.
"Over the past year, the Commission conducted a review of the Order, which comprised an initial consultation, engagement with stakeholders and counterpart competition agencies, as well as a collection of data and market intelligence from an independent industry expert. Following the review, the Commission published a proposal to renew the Order in May 20223 and sought representations from interested parties in accordance with section 20 of the Ordinance," the Competition Commission said.
"The Commission has come to the conclusion that the relevant activities of the VSAs continue to meet the requirements of the efficiency exclusion. It also considers the continuation of the Order to be merited and effective. Accordingly, the Commission has decided to renew the Order for a duration of four years," it added.
VSAs are agreements between shipping lines on certain operational arrangements, covering activities such as the exchange of slots on each other’s vessels, coordination of sailing timetables, and use of port terminals.
The Commission issued the Order in August 2017 in light of its assessment that this category of liner shipping agreement enhances overall economic efficiency.
It noted that while the original order lasted for five years an extension has only been granted for four years.
"This is in light of the continuing impact of the Covid-19 pandemic on the prevailing market conditions which warrants a review of the Order within a shorter time frame," it said.
The Commission noted that it will commence a review in three years' time.
