Conferences in Liner Shipping

A liner conference is defined by UNCTAD’s Convention on a Code of Conduct for Liner Conferences (Chapter 1) as ‘a group of two or more vessel-operating carriers which provides international liner services for the carriage of cargo on a particular route or routes within specified geographical limits and which has an agreement or arrangement, what-ever its nature, within the framework of which they operate under uniform or common freight rates and any other agreed conditions concerning the provision of liner services. Liner conferences are essentially trade agreements between shipping lines, which could legally fix prices and coordinate capacity on their respective trade lanes. Examples of liner conferences that existed till late 2008 include the Far Eastern Freight Conference (FEFC) and Trans-Atlantic Conference Agreement (TACA). Liner conferences such as TACA have tried to install shared fixing of intermodal inland rates in Europe. The European Commission opposed such practices and decided that the broad block exemption from the usual ban on restrictive agreements given to traditional maritime liner conferences (EC Regulation no. 4056/86) could not be broadened to include inland operations. In March 2003, an OECD report recommended that member countries remove an antitrust exemption for price-fixing and rate discussion.

A European Commission consultation paper (2003) and White Paper (2004) argued that there was no causal link between price-fixing and reliable liner services because conferences cannot enforce tariffs. However, transport users did not consider the conference system delivered adequate services. Given the extent of the relationships between carriers in conferences, consortia, alliances, and vessel sharing agreements, the extent to which conferences are subject to outside competition was complex and had to be carried out on a case-by-case basis. In the end, the European Union repealed EC Regulation No. 4056/86 in 2008 through Council Regulation 1419/2006. This ended the antitrust immunity that liner conferences had long enjoyed and thus made an end to the liner conference era concerning Europe.