Shipping firms promise the EU steps to prevent price hike collusion

Several container shipping companies have promised to change practices that potentially allowed them to raise the price of global goods transport, the European Commission announced Thursday, following an investigation.

Many products sold to consumers and companies in the EU are shipped from other parts of the world, meaning that high shipping costs and a lack of competition among cargo operators can drive up consumer prices.

The 14 firms under investigation regularly ship containers between ports such as Shanghai, Hong Kong or Singapore, and EU destinations such as Hamburg in Germany, the Dutch port of Rotterdam or Southampton in Britain, the EU's executive said.

They include COSCO of China, Hapag Lloyd and Hamburg Sued of Germany, Maersk of Denmark, MSC of Switzerland and other companies based in France, Taiwan, South Korea, Japan, Hong Kong, the United Arab Emirates and Israel.

Since 2009, the companies have regularly announced their planned price increases - but not the final price customers would be charged - in specialized trade press or on their websites for example, the commission said when it launched its investigation in 2013.

These announcements do not give customers enough information on the new prices, but allow carriers to be "aware of each other's pricing intentions and may make it possible for them to coordinate their behaviour," the European Union's executive said Thursday.

"Container shipping accounts for the vast majority of the non-bulk freight carried by sea to and from Europe," EU Trade Commissioner Margrethe Vestager said, adding that the industry is therefore "essential" to European companies and the bloc's economy.

In response to the investigation, the shipping companies promised to stop publishing and communicating planned rate increases and instead committed themselves to announcing their future maximum prices, at most 31 days before they enter into force.

The commitments "will make prices for these services more transparent and increase competition," Vestager said. The 14 shipping companies will be legally bound by them for the next three years, starting December 7.

Last update: Thu, 07/07/2016 - 12:39
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