Shipping cartel exposed: Major lines accused of fixing cargo rates on SA trade routes

The Competition Commission has referred a complaint against eight cargo shipping companies to the Competition Tribunal for prosecution for alleged price fixing.

The eight cargo shipping companies, respondents, are Maersk South Africa, Mediterranean Shipping Company (MSC), CMA CGM Shipping Agencies South Africa, Pacific International Lines South Africa, Mitsui O.S.K Lines South Africa, Evergreen Agency South Africa, COSCO Shipping Lines South Africa, and K Line Shipping South Africa.

The Commission said in a statement on Tuesday that the respondents are global container shipping liners involved in shipping cargo for import and export purposes across the globe, including South Africa. They are alleged to have engaged in the fixing of the rates called General Rate Increase (GRI) charged to customers for the shipment of general cargo enroute from South Africa to Asia and back and from South Africa to West Africa and back.

A GRI is a fee increase announced by shipping companies for specific routes to cover rising operational costs and maintain profitability. It applies to all general rates on a given trade lane and is implemented as a percentage increase, with a set amount often announced in advance. 

This conduct constitutes price fixing which contravenes section 4(1)(b)(i) of the Competition Act, No. 89 of 1998, as amended (“the Act”). The conduct is alleged to have started in 2008 and ceased in 2018. 

The Commission said its investigation found that the respondents charged the same GRI for the routes from Shanghai, Ningbo and Shekou to Durban, from Durban to Hong Kong, and from Qingdao to Durban.

"The dismantling of the cartel will reduce the price of goods imported to South Africa for the benefit of consumers and will also reduce the costs of exports out of South Africa, which will, in turn, render the South African exports competitive in the world markets,” said Commissioner Doris Tshepe.

BUSINESS REPORT