29. 5. 90 Official Journal of the European Communities No C 130/3 
Notice pursuant to Article 12 (2) of Council Regulation (EEC) No 4056/86 and Article 12 (2) 
of Council Regulation (EEC) No 1017/68 concerning Case No IV/33.304 Gulfway Agreement 
(90/C 130/02) 
1. On 22 August 1989 the Commission was requested by the parties referred to below under 
Article 12 (1) of Regulation (EEC) No 4056/86 to exempt under Article 85 (3) of the EEC 
Treaty the agreement referred to below. Pursuant to Article 4 (8) of Commission Regulation 
(EEC) No 4260/88 of 16 December 1988, the Commission informed the applicants that it 
would examine the agreement also under the provisions of Council Regulation (EEC) No 
1017/68 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to 
inland and waterway transport. The applicants submitted their comments on this issue 
subsequently. 
The parties 
2. The parties are shipping concerns engaged in the liner trades between northern Europe 
and the US Gulf of Mexico. 
The parties are, on one side, some of the members of the North Europe-USA Rate Agreement 
(Neusara) and the USA-North Europe Rate Agreement (Usanera), called 'association parties', 
namely: 
Atlantic Container Line (ACL) BV, 
Atlantic House, 
Herbert Walker Avenue, 
Western Docks, 
Southhampton S09 1HA, 
UK. 
P & O Containers (TFL) Limited, 
Beagle House, 
Braham Street, 
London El 8EP, 
UK. 
Compagnie Generale Maritime (CGM), 
Cedex 18, 
92085 Paris La Defense, 
FR. Hapag Lloyd AG, 
Ballindamm 25, 
2000 Hamburg 1, 
FRG. 
Sea-Land Service Inc., 
PO Box 800, 
Iselin, 
New Jersey 08830, 
USA. 
Nedlloyd Lijnen BV, 
Boompjes 40, 
3011 XB Rotterdam, 
NL. 
and, on the other side, independent liner companies, called 'other carrier parties' or 'OCPs', 
namely: 
Deppe Linie GmbH & Co., 
Ballindamm 8, 
2000 Hamburg 1, 
FRG. 
Lyles Bros Steamship Co. Inc., 
300 Paydras Street, 
New Orleans, 
La. 70130, 
USA. 
Transportacion Maritima Mexicana 
SA de CV (TMM), 
Av. de la Ciispide n° 4755, 7 Piso, 
Col. Parquest del Pedregal, CP, 
Delegacion Tlalpan — 14010 Mexico, DF. Euro-Gulf International Inc., 
Suite 300, 
515 North Belt E. 
Houston, Texas 77060, 
USA. 
South Atlantic Cargo Shipping NV, 
Chuchubiweg 17, 
PO Box 3585, 
Curacao, 
Netherlands Antilles. 
^oCP30^t C^fficialjournalof theEuropeanGommunities 29^90 
Th^A^^^i^^ 
3 The Agreement became effective on27September 1987, and willcontmuein force and 
effect for an indefinite term till the parties decide otherwise The geographic scope of the 
Agreements 
1 The eastbound trade fromUS Gulf of ^ie^ico ports in the Key^est,EloridaBBrownsvdle, 
Te^as range ^Gulfports^and continental USintenor and coastal points viaGulfports,to 
ports and points in the United Kingdom and the Republic of Ireland t^the^UK ranged,ports 
in POenmark, Sweden, Norway, Rinland and Roland, Baltic ports intheSovietUmon, and 
points in such countries via European ports, within the scope of the Agreement r^the 
^Scanbalt ranged, portsinGermanyr^East and ^est^,Belgium,Prance^BayonneBMunkirk 
ranged and the Netherlands, and all points in Europe other than points in the UK or 
Scanbalt ranges, via European ports within the scope of the Agreement r^the ^Continental 
ranged 
2 The westbound trade from the UK, Scanbalt and Continental ranges, to Gulf ports directly 
by^ater,or by water to US South Atlantic ports in the Cape fdatteras,Vi^gimaBKey^est, 
Plonda range and thence by overland service to Gulf ports,and all US interior andcoastal 
points via Gulf ports,all the foregoing hereinafter referred to as the^trades^orthe^trade^ 
Theterm ^ports^includesportsandpomts on mlandwaterways tributaries toall European 
and Gulf ports within the trade and the term ^overland^ includes transport by inland 
waterwav carrier as well as transport by ^ail, motor or other surface carrier 
Rursuant to the Agreement the association parties may meet to discuss or otherwise 
communicate, and reach accord with all or any of the C^CRs with respect in particular to 
^ uniform, common or differential rates, including but not limited to volume and time 
volume, local, ^^^r^^,pro^ect,minimumBma^imumandproportional rates,through 
rates, inland portions of through rates, and charges for all services provided m 
connectionwithtransport in the tradenot covered by the aforesaid rates, including but 
not limited to surcharges, arbitranes, heavy lift, e^tra length, minimum bill of lading, 
equipment handover,termmal and European inland charges, 
d^ classifications of cargo and their respective tariff regulations, rates, rules and charges 
relating containers and equipment, 
^ amounts of brokerage and freight forwarder compensation, and conditions for the 
payment thereof, 
^h programmes to obtain such information as may be deemed necessary or desirable to 
conduct their business under this Agreement, 
^ rules delating to the payment of rates and charges, including security requirements, 
suspension and restoration of credit privileges, handling of delinquent accounts and 
interest thereon, and notices to parties with respect to all such matters 
Theparties are authon^ed,but not required, tomeetorotherwise discuss their respective 
service contracts, if any, inthe trade, includmgconsideration, discussionande^changeof 
information in this respect, and to reach consensus or agreement thereon but shall not have 
an^ obligationunder the Agreement to adhere, other than^oluntanly to any such consensus 
or agreement The parties will maintain their own service contract essential terms public 
cations The Agreementdoes not authorise any common subpublication or^oint service 
contracts among the parties 
29. 5. 90 Official Journal of the European Communities No C 130/5 
"With a view to meeting the association parties, OCPs are authorized to caucus or otherwise 
communicate, to consider and exchange information regarding matters within the scope of 
the Agreement, for the purpose of endeavouring to reach common positions or clarify 
differences in positions in respect thereto among them. No OCP shall however be obligated 
to so caucus, or request or provide information, the exchange thereof being strictly a 
voluntary matter. 
Membership is open to any vessel-operating ocean common carrier. 
Concerning their meetings, any party may propose that any matter within the scope of the 
Agreement be considered or acted upon at any meeting. Association parties also may invite 
any OCP or OCPs to attend all or any part of any of its meetings as an observer and solicit 
its or their views, opinion or position on any matter within the scope of the Agreement. 
Matters presented for decision are determined by the mutual consent of the parties in 
interest and no party is obligated to take any action, or refrain from taking any action, with 
respect to which it has not consented. The parties, however, are committed to reach a 
consensus on such matters and endeavor to resolve differences through amicable 
compromise in order to achieve the essential objectives of the Agreement. The parties in 
interest with respect to any particular matter are an association party or parties on the one 
hand and on OCP or OCPs on the other, and any agreement reached between such parties 
is implemented by them notwithstanding that any other party has not consented thereto and 
is not bound thereby. All matters within the scope of the agreement may be considered and 
determined by poll, as well as at meetings of the parties. 
Each party retains the right to act independently on any matter within the scope of the 
Agreement and is not obligated to, but may, provide notice of such actions to other parties, 
whether before or after the fact. 
According to the parties the purpose of the Agreements is to provide for voluntary 
cooperation and thereby foster the maintenance of stability of services and conditions of 
transport and promote the development and growth of commerce. Pursuant to the 
Agreement, parties may cooperate on a limited basis as regards freight rates and other 
conditions with the object of stabilizing trading conditions within the geographical scope of 
the Agreement. Admittedly, a restriction of price competition will arise from the exchange 
of pricing information. 
The market 
4. According to the parties to the Agreement, their market share in the North Europe-US 
Gulf trade during calendar year 1988 was as follows: 
Relevant trade and sub-trades 
Eastbound sub-trade 
Westbound sub-trade 
Total relevant trade Market share of Agreement parties 
50,5 % 
57,7 % (') 
62,2 % (2) 
63,0 % 
70,5 % (') 
80,7 % O 
55,1 % 
62,3 % O 
68,9 % (2) 
(') Includes Deppe and EuroGulf, which carriers became party to Gulfway effective 12 April 1989. 
(') Includes Transportacion Maritima Mexicana which carrier became a party to Gulfway effective 8 November 1989. 
No C 130/6 Official Journal of the European Communities 29. 5. 90 
Liner operators not parties to the Agreement currently offering direct service in the Agreement 
trade are said to exist in number of three eastbound and two westbound. Competing liner 
operators not parties to the Agreement serving alternate eastbound and westbound routings are 
said to exist in number of 20 via US Atlantic ports, eight via US West Coast ports, 14 via Great 
Lakes/Canadian ports and 15 via Mediterranean ports. The market share of these operators in 
tht total US-Europe trades in said to have been the following: 
Relevant trade and sub-trades 
Eastbound sub-trade 
US-Europe 
Westbound sub-trade 
Europe-US 
Total relevant trade Market share of Agreement parties 
89,5 % 
88,0 % (') 
87,0 % (2) 
93,4 % 
92,6 % (') 
91,6 % O 
91,6 % 
90,5 % O 
89,5 % O 
(') Excludes Deppe and EuroGulf which carriers became party to Gulfway effective 12 April 1989. 
(!) Excludes Transportacion Maritima Mexicana which carrier became a party to Gulfway effective 8 November 1989. 
The parties submit that numerous non-liner tramp and contract carriers provide transport 
services to shippers of commodities historically carried in liner service in these trades, and that 
there is also substantial competition by air freight carriers that affects higher value commodities 
and therefore has a greater proportional effect on revenue. It is estimated that aproximately 
5 % of the tonnage of non-liner cargo moving in the US-Europe trades can be considered as 
liner cargo carried by non-liner substitutes forms of transport during 1988. Accordingly the 
parties estimate that their market share in the US-Europe trades in 1988 was the following: 
Relevant trade and sub-trades 
Eastbound sub-trade 
Westbound sub-trade 
Total relevant trade Market share of Agreement parties 
8.2 % 
9.3 % (') 
10,1 % (') 
6,3 % 
7,0 % O 
8,0 % O 
7,2 % 
8,2 % (*) 
9,1 % O 
(') Includes Deppe and EuroGulf which carriers became party to Gulfway effective 12 April 1989. 
(2) Includes Transportacion Maritima Mexicana which carrier became a party to Gulfway effective 8 November 1989. 
EXEMPTION 
5. As stated above, the parties acknowledge that the Agreements they have concluded 
restrict price competition. They consider, however, that the Agreements qualify for exemption 
under Article 85 (3) as: 
(i) they contribute to improving distribution and economic progress in so far as they promote 
stability through cooperation on rates; 
(ii) they allow consumers a fair share of the resulting benefit, stability giving rise to reliable 
services to shippers; 
29. 5. 90 Official Journal of the European Communities No C 130/7 
(iii) they impose only restrictions which are indispensable to the attainment of the abovemen-
tioned objectives; according to the parties: 
— There is only one restriction of competition arising from the operation of the 
Agreement, namely the inherent restriction on price competition between the parties 
resulting from the exchange of information on rates (and occasional agreement on 
rates). With regard to price competition, the applicants affirm: first, that a large part of 
the cargo shipped by the parties to the Agreement is likely to be subject to the nego­
tiation of individual service contracts; secondly, that there is considerable price trans­
parency in the trade resulting from the tariff filing requirements under US law; thirdly, 
that entry to the North Europe/US trade is entirely open. 
— It is the reduction, but not elimination, of price competition that contributes to the 
stabilizing effect that is accepted as a benefit justifying exemption of the cooperation 
between shipping companies operating liner services. 
— The one inherent restriction of competition arising from the Agreement is thus indis­
pensable to the attainment of that accepted benefit. 
— The pricing flexibility of the parties is safeguarded by the right of independant rate 
action they are entitled to exercise; 
(iv) they do not eliminate competition in respect of a substantial part of the services in 
question because: 
— the mobility of fleets subjects maritime cartels to constant competition which they are 
unable as a rule to eliminate as far as a substantial proportion of the shipping services 
in question is concerned, 
— entry to the routes in question is open. There are no barriers to entry. Accordingly, the 
shipping lines that operate within the Agreement are subject to constant competition 
that they are unable to eliminate, 
— finally, the applicants affirm that the existence of other actual competitors is further 
evidence of the compatibility of the effect of the Agreement with the final condition 
for exemption under Article 85 (3). 
6. This notice is issued pursuant to the procedure established by Article 12 of Regulation 
(EEC) No 4056/86 and Article 12 of Regulation (EEC) No 1017/68, the Commission having 
determined prima facie that the arrangement in question meets the tests of Article 85 (1) of the 
Treaty. The Commission has not, at this stage, formed any view on the applicability of Article 
85 (3) of the Treaty to the arrangement. 
In accordance with Article 12 (2) of Regulation (EEC) No 4056/86 and Article 12 (2) of 
Regulation (EEC) No 1017/68, the Commission invites interested parties to send their 
comments within 30 days from the date of publication of this notice, quoting reference 
IV/33.304 to: 
Commission of the European Communities, 
Directorate-General for Competition, 
Directorate 'Restrictive practices, abuse of dominant positions and other distortions of compe­
tition III', 
200, rue de la Loi, 
B-1049 Brussels.