Carriers toting the world’s goods may be conspiring to set false freight rates.
South Africa’s Competition Commission raided six major shippers operating in the country this week over allegations of price fixing.
According to World Maritime News, the commission said it has reason to believe Hamburg Süd South Africa, Maersk South Africa, Safmarine (a Maersk subsidiary), Mediterranean Shipping Company, Pacific International Line South Africa, and CMA CGM Shipping Agencies South Africa have engaged “in collusive practices to, inter alia, fix the incremental rates for the shipment of cargo from Asia to South Africa in contravention of the Competition Act.”
A member of the public reportedly tipped off the South African regulator, initiating the investigation and prompting the seizure of documents and electronic data that would point to unfair practices in violation of the country’s Competition Act, which prohibits price fixing.
“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping liners in this region results in inflated prices for cargo transportation,” commissioner of the Competition Commission, Tembinkosi Bonakele, said. “Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”
The issue naturally raises the question as to whether these shippers, or their counterparts in other countries, have been colluding on prices for other routes as well. Most shippers have been through investigations for price-fixing, but they tend to be timely and hard to prove—especially at a time where freight rates are at record lows.
The price-fixing investigation is ongoing and, according to The Wall Street Journal, Maersk, MSC and CMA CGM have said they are cooperating.