Competition regulator launches consultation on proposal to extend block exemption for vessel sharing agreements

5 June 2025

On 27 May 2025, the Malaysia Competition Commission (“MyCC”) published an online public consultation form to collect feedback on its proposed extension of a block exemption application for Vessel Sharing Agreements (“VSAs”) in liner shipping services for a further period of five years.

The consultation follows an application from the liner shipping industry for an extension of the Competition (Block Exemption for Vessel Sharing Agreements in respect of Liner Shipping Services through Transportation by Sea) Order 2019 (“Order”) which was issued by MyCC in 2019 with effect from 7 July 2022 to 6 July 2025. The Order is available here.

The Competition Act 2010 (“Act”) prohibits anti-competitive agreements, that is, agreements which may significantly prevent, restrict, or distort competition in any market for goods or services. The MyCC may, subject to requirements under the Act, grant an exemption to an agreement if the following conditions are met:

• The agreement is likely to have direct significant technological, efficiency, or social benefits;
• Benefits could not reasonably be attained without the agreement;
• Effects of the agreement are proportionate to the benefits provided; and
• The agreement would not completely remove competition in a significant market for the relevant goods and services.

VSAs are agreements entered into between liner shipping operators (“Operator”) to establish operational arrangements for maritime transportation services but does not include any inland transport services for the carriage of goods provided by, among other things, logistics providers, forwarders, and depot operators.

The Order exempts VSAs from horizontal and vertical agreement prohibitions, as set out in the Act, in relation to liner shipper services by sea, including coordinating or jointly operative vessel services and exchanging or chartering vessel spaces.

In order to benefit from the Order, a VSA must :

• be for the Operators to share vessels, jointly operate vessel services, or exchange or charter vessel spaces, for a reasonable period;
• not prohibit each Operator from entering into confidential contracts and offering any arrangement and pricing of its liner shipping services by sea;
• not cover carriage of goods by land, such as transportation by logistics providers, forwarders, and depot operators;
• not include any arrangements on price-fixing, price recommendations, or tariff imposition on the party relying on the liner shipping services for the transportation of goods by sea (“transport user”); and
• not require the Operator to disclose any confidential information relating to liner shipping services by sea to the transport user.

If the Operator deviates from the conditions above, the MyCC may cancel the block exemption via written notice.

Provision of feedback

The MyCC has completed a preliminary assessment of the application to extend the block exemption and is now welcoming feedback from the public on the proposed extension.  Feedback may be submitted via this form by 25 June 2025. 

Further information

This article has been prepared with the assistance of Associates Siah An Gel and Mohamad Syafiq bin Mohamad Tazri.