Following the FBI, the EU will also join the investigation into the market monopoly of the container

Europe and the United States began to settle accounts after the fall
The sword refers to the major liner companies?

Citing the latest information from Xinde Maritime.com, competition regulators from the United States, the United Kingdom, Canada, Australia and New Zealand are jointly investigating to confirm whether there is potential cartel behavior in the global container supply chain. It is worth mentioning that these five countries are also members of the so-called Five Eyes alliance.


                      FBI and U.S. federal antitrust agencies begin investigation

Although multiple investigations have been announced in various countries and regions, the recent investigations into the industry are becoming intensive. According to Xinde Maritime Network, the EU is also likely to strengthen its investigation soon.

Survey of Five Eyes Countries

First, relevant agencies from the five countries mentioned above, including the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the New Zealand's Commerce Commission, and the UK Competition and Markets Authority (United Kingdom Competition and Markets Authority) and the Antitrust Division of the U.S. Department of Justice are forming a joint investigation working group to participate in this investigation.

The new task force will meet regularly to develop and share intelligence to detect and investigate suspected anti-competitive behavior and collusion. The task force will focus on investigating illegal practices related to supply chain disruptions during the Covid-19 pandemic, including collusion that has resulted in more expensive shipping. The five countries said that global supply has been severely disrupted since the outbreak of the new crown. They noted that the impact on increased demand for containerized cargo and severe congestion in supply chains around the world did affect freight rates. However, they also highlighted that freight rates on major global trade routes are now about seven times higher than they were two years ago.

Anna Rawlings, chair of the New Zealand Business Council, said: "We recognise that supply chain issues related to Covid-19 pose significant challenges to the global economy...however, we remain zero tolerance for unscrupulous businesses that use the pandemic as an opportunity for cartel behaviour, such as Unnecessary collusion or anti-competitive behavior among competitors. The International Working Group will continue to work to deter and punish cartels.”

The five competition agencies said they would work together to identify and share information about potential anti-competitive practices affecting global and domestic supply chains.
Australian Competition and Consumer Commission chairman Rod Sims said: "We will share intelligence to identify any behaviour that restricts or distorts competition and companies are now mindful that Australia and its international counterparts will be prepared to act."

The U.S. Department of Justice's two-year investigation into possible collusion between the world's top shipping companies came to an end in February 2019 without charges or penalties. However, due to the various consequences of the outbreak, from the second half of 2020 onwards, accusations of profiteering and collusion of container shipping companies have grown as global shipping companies generate staggering record revenues during the pandemic .

In fact, regulators in the United States, the European Unio and China met in September last year and determined that so far there is no evidence of anticompetitive behavior in container shipping.

Aware of the growing criticism and speculation, the liner company decided last year to close the 50-year-old International Council of Container Ship Operators (unofficially known as the Box Club), a meeting of the world's top liner company CEOs. closed-door meeting.

Welcoming news of the pan-national inquiry, Olaf Merk, Ports and Shipping Programme Manager at the International Transport Forum (ITF) at the Organisation for Economic Co-operation and Development (OECD), said: “Coordination in monitoring and managing liner shipping is long overdue. [Container shipping] is a global industry, but there is no global regulatory approach to competition in liner shipping. Initiatives like this can help address this regulatory loophole.”

“This is a timely and welcome announcement, with competition authorities around the world anxious about the market performance of shippers. Carriers should see it as A rhetorical warning about how freight rates and capacity are expected to behave as the world economy emerges from the pandemic and normal market forces come into play.

The EU may also investigate further

According to Xinde Maritime Network, the European Association of Freight, Transport, Logistics and Customs Services (CLECAT) recently sent a letter to the EU, accusing the industry of unfair and discriminatory practices and urging an investigation into the container shipping industry.

CLECAT has written to EU Competition Commissioner Margrethe Vestager asking the European Commission to use its investigative powers to determine the extent of concentration, consolidation, harmonisation and cartelisation of the market for upstream container liner shipping services serving the EU.

CLECAT has called on the Commission to investigate block exemption, vertical integration, consolidation, data control and thus market dominance under EU competition rules and in the context of the Commonwealth Block Exemption Regulation (CBER) review.

Nicolette van der Jagt, Director General of CLECAT, commented: "Vertical integration is particularly unfair and discriminatory, as operators enjoying exemptions from normal competition rules are using windfall profits to compete with other industries that do not have such exemptions."

She added: “Alliances are also problematic as fewer carriers lead to fewer route options, constraints on capacity supply and market dominance, which in turn enables some carriers to differentiate between larger BCOs, SMEs and freight forwarders — which in turn leads to higher rates for everyone.”