Friday, September 4, 2015

IS IT PRICE FIXING BY HONG KONG FORWARDERS?

Shippers warn of exodus

Imogene Wong
Friday, September 04, 2015

The local shipping industry wants to be exempted from the new competition law, which comes into effect on December 14.
Shipping firms confer regularly on fixing benchmark freight rates that they then use as a reference.
"Our activity could be deemed illegal if we are not offered an exemption," a long-time executive in the local shipping sector said.
Lack of an exemption could also persuade local shipping companies to move most of their operations to mainland ports such as Yantian in Shenzhen, the executive warned.
Shipping companies hold regular meetings to discuss prices and set guidance freight rates to avoid extreme volatilities, the source said.

Companies would risk a penalty of up to 10 percent of the annual revenue for breaking the law, which aims to prevent price-fixing and other anti- competitive behavior. The law will be enforced by the Hong Kong Competition Commission.It said earlier it would take advance applications for block exemptions from affected industries, but would not be in a position to make any rulings before the law becomes effective.
The commission will be responsible for investigating and initiating prosecutions.
It is still in talks with the shipping industry, the source said.
A large portion of cargo throughput handled in Hong Kong ports are transshipments from the mainland, the source said.
Singapore and Malaysia have granted such exemptions for shipping firms.