Commission raids shipping line offices in collusion probe
THE Competition Commission seized on Wednesday documents and electronic data belonging to six global cargo shipping companies as part of an investigation into suspicion of collusion.
The action comes as container lines struggle in atrocious market conditions caused by a glut of ships and slowing global trade that have battered earnings and forced at least one firm out of business.
South Korean container line Hanjin collapsed in August, leaving cargo worth an estimated $14bn stranded on its ships.
The six shipping line offices in Durban and Cape Town were raided simultaneously just after 9am on Wednesday after the commission obtained warrants to search the premises from the Cape Town High Court and Pietermaritzburg High Court.
The commission said it had reasonable grounds to suspect that Hamburg Sud SA, Maersk SA, Safmarine, Mediterranean Shipping Company, Pacific International Line SA and CMA CGM Shipping Agencies (SA) had engaged in collusive practices to fix the incremental rates for the shipment of cargo from Asia to SA in contravention of the Competition Act.
The companies, whose parents’ headquarters are in Germany, Denmark, Switzerland, France and Singapore, are involved in the transportation of general cargo, ranging from frozen foods to garments and footwear.
The commission said a searchand-seizure operation was conducted based on information from a member of the public.
The commissioner of the Competition Commission, Tembinkosi Bonakele, said any cartel by shipping lines resulted in inflated prices for cargo transport.
“SA is a strategic hub for the trade of goods in and out of the Southern African region.
“Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets,” Bonakele said.
He said that such cartels had the effect of derailing economic growth in the region significantly.
Maersk and its Safmarine unit both confirmed that competition authorities had carried out an unannounced inspection at their offices in SA.
“The purpose of this inspection is to ascertain whether there is evidence of any infringement of the South African competition [regulations] in relation to alleged price fixing. We are co-operating fully with the [commission].”
However, Maersk and Safmarine emphasised the fact that such inspections were carried out did not mean that a company had engaged in anticompetitive behaviour, nor did the inspections prejudge the outcome of the investigation itself.
“Unannounced inspections are often a preliminary step in investigations into suspected infringements of competition rules.
“The fact that the [commission] carries out such inspections does not mean that a company has engaged in anti-competitive behaviour,” Maersk, the world’s biggest shipping line, said.
In July, EU antitrust regulators accepted an offer from Maersk and 13 competitors to change their pricing practices in order to stave off possible fines.
The European Commission opened a case against the container shipping lines in late 2013, following dawn raids on their offices two years earlier.
Maersk parent company AP Møller-Maersk announced last week a restructuring that would see the $30bn group bulk up its transport business, while seeking alliances or a separate listing for its energy operations as worsening freight markets and oil market turmoil take their toll. With Reuters
Such cartels increase the costs of trading in the region and render the region uncompetitive