In yet another development targeting the global shipping line industry for alleged untoward billing practices, the Common Market for Eastern and Southern Africa (Comesa) has announced that it will be investigating a tripartite of carriers for supposed price collusion.
The lines are CMA CGM, Africa Feeder Line and Maersk, the world’s second’s biggest ocean freight service by way of capacity.
The news comes on the back of Comesa stating it has observed price coordination that contravenes Article 16 of the bloc’s regulations prohibiting anticompetitive behaviour.
The Comesa investigation itself follows soon after it emerged that the US Department of Justice (DoJ) had subpoenaed Maersk in relation to ongoing investigations into suspected breach of US antitrust laws at the behest of America’s Federal Maritime Commission (FMC).
The FMC has for some time made it clear that it intends to step into the breach of freight forwarders and shippers in general to examine the contentious issues of demurrage and detention charges.
Recent financial results from various shipping lines indicate a bumper year for carriers, with about $200 billion made in 2021 – collectively more than the 21 years preceding it this century. This has only served to add to the growing impetus for inquiry into the shipping industry’s good fortune.
Whereas previously it seemed difficult for the FMC to convince the US Administration that it needed the necessary jurisprudential backing to pursue the carriers, the out-of-proportion profits that lines have made have worked in the FMC’s favour.
This was especially apparent when it emerged that legal officials from the DoJ were preparing themselves to work with the FMC in turning up the heat on shipping lines.
It included, among other things, news that the Biden administration was on the verge of making the necessary adjustments to antitrust laws against which the world’s three shipping alliances were buffered.
Essentially it meant that the alliances – 2M (Maersk and MSC), THE Alliance (Yang Ming, NYK Group, MOL, Hapag-Lloyd, ONE, K-Line, HMM), and Ocean Alliance (CMA CGM, Cosco, Evergreen, OOCL) – could henceforth be prosecuted for suspicion of imprudent billing practices.
The Maersk subpoena, coming not long after US President Joe Biden’s State of the Union address in which FMC/DoJ action against the global shipping industry was announced, therefore comes as no surprise (*).
Moreover, news that Comesa is now also looking into allegations of price collusion, casts even more doubt on the carrier industry’s excuse that an increase in running costs because of Covid-related challenges is the reason freight rates have quadrupled.
In addition to the FMC/DoJ development and Comesa announcing its own investigation, the liner industry is also finding itself in the crosshairs of Clecat and the Five Eyes (FVEY) group of nations.
Clecat, representing 20 national organisations from Europe’s logistics industry, has asked the European Commission to investigate the liner industry.
As for FVEY – consisting of Australia, Canada, the UK, US and New Zealand – it has said that there is growing momentum, with countries like South Korea in tow, to examine the pricing structure of ocean freight supply chain providers.
* Read this for context: https://tinyurl.com/mrwfztey
