EU Settles Global Rate-Rig Allegations

 16 Feb 2016    Carriers, Finance, Politics

Following years of investigations into container freight price fixing by the world’s 15 major shipping carriers, in which shipping lines would coordinate prices for personal gain, the EU Commission has now reached a settlement, according to Shipping Watch.

Historically, the EU Commission claimed that shipping lines would announce general rate increases ahead of time in a bid to maintain uniform prices and effectively save on costs.

The EU Commission said: "The Commission expressed the concern that this practice may allow the parties to explore each other’s pricing intentions and to coordinate their behaviour.

Technical Paper: Freight Rate Mystery Explained

“The Commission is concerned that the practice may enable the parties to ‘test’, without incurring the risk of losing customers, whether they can reasonably implement a price increase and thereby may reduce strategic uncertainty for the parties and diminish the incentives to compete.

“The Commission is concerned that this conduct may amount to a concerted practice in violation of Article 101TFEU and Article 53 of the EEA Agreement.”

In a previous article by Port Technology, an executive of Japan-based Kawasaki Kisen Kaisha (K-Line) was sentenced to 18 months in prison for price-fixing.

On the back of this story, a top industry executive claimed that shipping was the most corrupt industry and highlights the need for more effective crime-prevention measures.

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