Antitrust Body Raids Shipping Lines and Warns Freight Cartel Evidence Will Bring Dire Consequences

SOUTH AFRICA – The South African Competition Commission is conducting search and seizure operations at the premises of six cargo shipping companies operating in the Western Cape and Kwazulu-Natal provinces. The Commission initiated the search and seizure operation as part of an ongoing investigation, after receiving information from a member of the public alleging that the ocean freight firms contravened the Competition Act by colluding in anti-competitive activities and the Commission is warning of dire consequences should evidence of cartel activity be discovered which might harm the interests of freight forwarders and other shippers.

The Commission says that it has reasonable grounds to suspect that Hamburg Sud South Africa, Maersk South Africa, Safmarine, Mediterranean Shipping Company (MSC), Pacific International Line South Africa and CMA CGM Shipping Agencies South Africa, have engaged in collusive practices to, inter alia, fix the incremental rates for the shipment of cargo from Asia to South Africa.

During the searches the Commission will seize documents and electronic data, which will be analysed together with other information gathered to determine whether these companies have violated the Competition Act. The companies under investigation are involved in the transportation of cargo for import and export purposes across the globe, including South Africa. The customers of these companies are mainly clearing and freight forwarding agents.

In terms of section 48 of the Competition Act, the Commission is authorised to enter and search premises and seize documents which have a bearing on its investigation. The Commission has obtained warrants authorising it to search the premises of these companies at the Western Cape High Court and Pietermaritzburg High Court. The operation is conducted with due regard to the rights of all the affected persons. Commissioner of the Competition Commission, Tembinkosi Bonakele, said:

“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping lines in this region results in inflated prices for cargo transportation. Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”