Busan Port Photo 15016451 © Firststar Dreamstime.com
© Firststar Dreamstime.com

The Korea Fair Trade Commission (KFTC) is investigating 20 local and overseas liner operators for colluding to fix freight on services from South Korea to China and Japan.

The probe comes just two months after it imposed an $81m collective fine on these operators for fixing South Korea-South-east Asia freight rates.

KFTC is understood to have sent review reports to the liner operators concerned, saying it is looking into allegations that they fixed freight rates on South Korea-China and South Korea-Japan lanes for 17 years.

The operators involved include South Korean carriers, like Korea Marine Transport Co (KMTC Line) and Sinokor and its subsidiary, Heung-A Line, ten Chinese container carriers and one Japanese liner operator .

The shipping companies are said to have failed to report collusion and unilateral acts of raising freight rates to the minister of oceans and fisheries, as required by Korea’s Shipping Act.

The act’s previous version did not explicitly include exemptions from the Fair Trade Act. Even then, as mentioned in its decision to penalise the liner operators for fixing freight on the South Korea-South-east Asia lane, the KFTC ruled that such actions have to be reported to the minister within 30 days and must be discussed with shippers.

After receiving feedback from shipping companies on the review report, the KFTC will meet on 27-28 April to determine any action. Industry observers are predicting that any fines will be similar or less than those imposed in the Korea-Southeast Asia case, as the cargo volumes involved are lower.

Even then, the $81m penalty was controversial and sparked protests from the ministry and South Korean shipping bodies, and more protests are expected if new fines are issued.

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