EC and carriers agree to ‘transparency’, general rate increases scrapped

Following its anti-trust probe, the European Commission (EC) has received commitments from 15 international container shipping lines to increase transparency in publishing future price increases over the next three years.

General rate increases (GRI) expressed as a lump-sum amount or a percentage rise will be scrapped as part of the agreement, the Commission said today.

The EC has suggested that pricing announcements would “benefit from further transparency” and should include a breakdown of the total price’s five main elements: base rate, bunker charges, security charges, terminal handling charges and peak season charges, if applicable.

Price increase announcements will not be made more than 31 days in advance of when the increase enters into force. Once published, the carrier will be bound to use the figure as its maximum price during the period of validity, but will remain free to offer lower prices.

These commitments do not apply communications with customers who have an existing rate agreement in force on the route to which the communication refers on that date. Neither will communications during bilateral negotiations or communications related to the needs of specifically identified purchasers be affected, the EC said.

The EC’s investigation looked into whether leading container lines were in breach of EU antitrust rules by publishing their future price increase intentions for services to and from Europe online and in the trade press.

The carriers involved in the investigation include Denmark’s Maersk; Geneva-based Mediterranean Shipping Company (MSC); French line CMA CGM; Taiwan’s Evergreen Marine; Germany’s Hapag Lloyd and Hamburg Sud; China Ocean Shipping (Group) Company (COSCO), China Shipping, OOCL (Orient Overseas Container Line); South Korean’s Hanjin and Hyundai Merchant Marine; Japan’s Mitsui OSK Lines (MOL) and Nippon Yusen Kaisha; United Arab Shipping Company and Israel’s Zim.

Commenting on the news, Chris Welsh, director of global and European policy at the Freight Trade Association, said:“We look forward to a new clear and open approach by the shipping line operators which will remove the need for our members to resort to court proceedings for competition damages.”

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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