The Impact of EU to Repeal the Block Exemption for Liner Shipping Conference

The first well known liner shipping conference was created for the UK/Calcutta trade in 1875. In 1986, European Union (EU) Council Regulation 4056/86 allowed liner shipping operators to have an exemption from EU competition rules to organize themselves into conferences with the aim of fixing prices and coordination capacity for the transport of containerized cargo. In September 2006, the council of EU decided to abolish that exemption from EU competition rules, with effect from 18 October 2008. This paper investigates the reasons why the EU decided to repeal the block exemption for liner conference after its operation for more than 130 years. The major issues studied are the following: (1) the development and influence of the liner conference and strategic alliance on the shipping industry; (2) the important regulations governing the operation of the liner conference promulgated by EU and Taiwan government; (3) responses of carriers to the EU action to nullify the shipping conference; and, (4) what action the stakeholders may take in response to the annihilation of the shipping conference from the EU-related trades.