Can the shipping company set the minimum shipping fee? Was fined 64 million US dollars, and 15 shipping companies asked to withdraw the fine!
Recently, 15 container shipping companies, including a number of South Korean shipping companies, jointly filed an application with the South Korean High Court to request the revocation of the penalty imposed by South Korea’s anti-monopoly regulator, the KFTC on its colluding freight charges.
According to the data: In January 2022, the Korea Fair Trade Commission announced that 23 shipping companies including Maersk Sealand, HMM, Evergreen, WHL, and KMTC were fined a total of $81 million for colluding and manipulating the shipping freight rates of the Korea-Southeast Asia trade route. Among them, KMTC has the highest provisional fine amounting to 29.6 billion won, and HMM faces a fine of 3.6 billion won. Evergreen, WHL, and YML were fined 3.399 billion won, 11.512 billion won and 24.19 trillion won respectively.
Five months later, the KFTC fined 15 container shipping companies a total of $64 million for collusion and manipulation of freight rates on routes operating between South Korea, Japan, and China. This is the second time in five months that the KFTC has imposed a fine of 96.2 billion won (about 80.7 million U.S. dollars) on 23 shipping companies for collusion in freight rates. It asked these shipping companies to China to stop restricting competition on these routes. The KFTC made the decision on June 9 this year after a two-month investigation into the conduct of these shipping companies between February 2003 and May 2019. According to KFTC data, from February 2003 to May 2019, HMM, the largest shipping company in Korea, colluded with 14 shipping companies for a total of 76 container freight charges.
HMM was the largest Korean shipping company involved in the operation, but due to its limited role on the route, the fine was relatively small, at only $39,000. Other shipping companies punished include: Heung-A Line, fined $12.5 million; KMTC LINE, fined $11.6 million; Sinokor, fined $9.6 million; SM Line fined $86,888. The 15 shipping companies penalized control between 86% and 93% of the market.
Shipping company asks court to force KFTC to release information
It is reported that South Korean shipping companies including HMM, KMTC, and Sinokor have asked the court to compel KFTC to release the information. They said the information would indicate that in January 2004, the KFTC had approved their joint action to determine minimum freight rates on the Korea-Japan route. It said the fine was made by the KFTC because of a complaint by the FIATA that the joint practice of setting minimum freight rates without consulting the shipper was illegal.
Operators argue that they have been consulting the MOF and shippers’ organizations about minimum freight rates, but are not obliged to inform them of the total freight charges charged as these are regulated by agreements. Therefore, during the preliminary investigation into the allegations of pricing of South Korea-Southeast Asia freight, the MOF of South Korea adopted an exemption from the Fair Trade Act. But because the exemption came too late, the KFTC said it could not be retroactive.
