News / 'Cartel' claim against shipping firms in South Africa 'finally' advanced

Photo 24771120 © Hongqi Zhang (aka Michael Zhang) | Dreamstime.com

South Africa’s Competition Commission has “finally” referred a complaint against eight cargo shipping companies – allegations of price-fixing and cartel-like behaviour – to the Competition Tribunal, but some have questioned the motivation.

Stretching over the 10 year to 2018, the complaint involves CMA CGM Shipping Agencies South Africa, Cosco South Africa, Evergreen Agency South Africa, K Line South Africa, Maersk South Africa, MOL South Africa, MSC, and PIL South Africa.

A commission statement said: “They are alleged to have engaged in the fixing of the rates called general rate increases (GRIs) 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.

“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.”

One forwarding source based in South Africa told The Loadstar “finally”, another noting they were “not surprised” by the decision, adding that “it has been going on globally for ages”.

While neither K Line nor MOL exist as independent operators, having been brought under one banner of Ocean Network Express (ONE), there is some hope in the forwarding community that precedents set elsewhere may lead to action.

One source pointed to the $2m fine for Hapag-Lloyd in 2022 by the US Federal Maritime Commission and the $3.7m it ordered Zim to pay Samsung in April, both for unfair detention and demurrage practices as evidence carriers could be held accountable for misdeeds.

“The carriers tend to sail close to the wind commercially, but those cases involving Hapag-Lloyd and Zim show that some US shippers have managed to have some success,” the source told The Loadstar.

Others appear a little more circumspect over the complaint, with Vespucci Maritime CEO Lars Jensen suggesting the statement from commissioner Doris Tshepe “appears more political than factual”.

Ms Tshepe said: “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.”

However, with the complaint concerning carrier behaviour from 2008 to 2018, Mr Jensen said this implied that “even if there was a cartel, this has not been the case for the past seven years”.

He added: “Hence, it is hard to see how this case would change current pricing practices. It should also be noted that South African ports suffer from heavy congestion and inefficient operations which is a key part of added costs to imports and exports.”