Competition Commission prosecuting shipping giants over alleged price fixing

The Competition Commission (CompCom) of South Africa has announced that it's prosecuting eight international cargo shipping companies for alleged price fixing.

Following a lengthy investigation, it's referred a complaint against the eight entities, which include Maersk SA and the Mediterranean Shipping Company (MSC), to the Competition Tribunal.

The global shipping liners 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 en route from South Africa to Asia and back, and from South Africa to West Africa and back.

This price-fixing conduct is alleged to have taken place over the course of a decade - from 2008 to 2018.

"The Commission’s 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."

Stephen Grootes gets more detail from Makgale Mohlala, Manager of the Cartels Division of the CompCom.

Explaining why it's taken years to get to this point, Mohlala notes that it has been a huge, complicated exercise involving a 'voluminous' amount of documents which the Commission had to carry out with limited resources.

"We started in 2016 when a Maersk customer approached us after being issued pricing letters bearing the same amount of increase and refusing to give that customer a discount. After we started investigating, we conducted a dawn raid at Maersk Hamburg, MSC and others - we seized a lot of documents as well as data. While it took a long time, we meant to crack it, so we've now put it out there for the companies to respond."

Mohlala notes it's not certain whether the companies involved did stop with these practices in 2018, the period to which the team's investigation led them.

'Remember that this is quite lucrative', he says.

"As part of the prosecution we'll get to get to that point for discovery, which is where they'll have to give us everything they have so that we can make an assessment."

For more detail on this alleged collusion between major global shipping companies, scroll back up to the audio player