Posts
The European Commission has raided the offices of many major shipping companies in Europe. The Commission says that the companies “may have violated the antitrust rules that prohibit cartels and restrictive business practices.” The Commission spokesperson Amelia Torres, stressed, however, that it was premature to reach any conclusions about these companies having broken the law. Representatives of the EC and UK Office of Fair Trading called on premises last week to ascertain whether there was any evidence of "infringement of European competition law related to rate collusion between lines and possible misuse of positions of market share dominance".
The Commission is said to be investigating the period after 2008, when ‘conferences’- shipping cartels- were banned in Europe. This action, followed soon with the downturn, saw shipping companies hard hit and responding by laying up vessels and slow steaming. There was much volatility in the freight markets at the time, and industry observers feel that see-sawing rates may have drawn the investigators’ attention. Mercator International’s Jesper Kjaedegaard implies that record profits last year may have spurred the move. “How quickly the situation changed is astounding and may have raised eyebrows in Brussels,” he said.
It is believed that major outifts like A.P. Moller-Maersk, MSC, Orient Overseas Container Line (OOCL), CMA CGM, MOL Neptune Orient Lines (NOL), Hanjin, Cosco and Hapag Lloyd are being investigated for possible anti-trust law violations. Many, including Maersk and MSC, have confirmed the raids. Besides documentation and public records, computer hard disks are also being scrutinised by inspectors.
Although these investigations seem to be preliminary, there is apprehension across industry that final EU actions may be similar to those taken by US and Europe against the airline industry and some freight forwarders last year. The Commission, if it feels it has sufficient evidence, can launch a formal investigation where companies would be liable, if found guilty, to massive fines of up to 10 percent of their annual worldwide sales. Panalpina, one of the forwarders investigated last year, was fined a total of US$50.3 million after pleading guilty to air cargo price fixing. Reports say that almost two dozen airlines paid more than $1.8 billion in fines then, and Air France-KLM alone was hit for $505 million. What is worse, the EU move sparked large civil lawsuits at the time by European shippers who claimed that the airline price fixing had hurt them. No wonder almost all the shipping companies raided were quick to promise full cooperation with the Commission’s investigators last week, while their PR arms moved quickly to soothe frayed employee and shareholder nerves.
Concerns aside, a humourist from one of the raided lines had the final word, according to media reports. Pointing to the collapse of many freight indices in recent times and the hard times that shipping companies are going through, he said, “If the industry has been fixing rates, it has been doing a terrible job of it.".
.
.
The Commission is said to be investigating the period after 2008, when ‘conferences’- shipping cartels- were banned in Europe. This action, followed soon with the downturn, saw shipping companies hard hit and responding by laying up vessels and slow steaming. There was much volatility in the freight markets at the time, and industry observers feel that see-sawing rates may have drawn the investigators’ attention. Mercator International’s Jesper Kjaedegaard implies that record profits last year may have spurred the move. “How quickly the situation changed is astounding and may have raised eyebrows in Brussels,” he said.
It is believed that major outifts like A.P. Moller-Maersk, MSC, Orient Overseas Container Line (OOCL), CMA CGM, MOL Neptune Orient Lines (NOL), Hanjin, Cosco and Hapag Lloyd are being investigated for possible anti-trust law violations. Many, including Maersk and MSC, have confirmed the raids. Besides documentation and public records, computer hard disks are also being scrutinised by inspectors.
Although these investigations seem to be preliminary, there is apprehension across industry that final EU actions may be similar to those taken by US and Europe against the airline industry and some freight forwarders last year. The Commission, if it feels it has sufficient evidence, can launch a formal investigation where companies would be liable, if found guilty, to massive fines of up to 10 percent of their annual worldwide sales. Panalpina, one of the forwarders investigated last year, was fined a total of US$50.3 million after pleading guilty to air cargo price fixing. Reports say that almost two dozen airlines paid more than $1.8 billion in fines then, and Air France-KLM alone was hit for $505 million. What is worse, the EU move sparked large civil lawsuits at the time by European shippers who claimed that the airline price fixing had hurt them. No wonder almost all the shipping companies raided were quick to promise full cooperation with the Commission’s investigators last week, while their PR arms moved quickly to soothe frayed employee and shareholder nerves.
Concerns aside, a humourist from one of the raided lines had the final word, according to media reports. Pointing to the collapse of many freight indices in recent times and the hard times that shipping companies are going through, he said, “If the industry has been fixing rates, it has been doing a terrible job of it.".
.
.
No comments:
Post a Comment