Thursday, September 29, 2016

Containing the Cartels

Six of the world’s biggest container shipping companies were raided by South African on suspicion of colluding to inflate rates between Asia and South Africa, the country’s Competition Commission said. The companies under investigation are involved in the transportation of cargo for import and export purposes across the globe‚ including South Africa. They use large metal containers as packaging crates and in-transit warehouses to store and transport general cargo such as frozen foods‚ garments and footwear.

The development comes as global container lines struggle in the worst-ever market conditions, caused by a glut of ships and slowing global trade, which has battered earnings and forced at least one out of business. The six companies raided comprise local subsidiaries of Denmark’s Maersk, Swiss-headquartered Mediterranean Shipping Company (MSC), France’s CMA CGM Shipping, Germany’s Hamburg Sud, Singapore-based Pacific International Line and Maersk unit Safmarine, the commission said in a statement. It said the firms were suspected of engaging in collusive practices to fix incremental rates on the shipment of cargo from Asia to South Africa.

“Any cartel by shipping liners in this region results in inflated prices for cargo transportation,” Competition Commissioner Tembinkosi Bonakele 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. 

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