15 Carriers Agree to EU's GRI Modifications
15 container liner shipping companies have said they will stop publishing and communicating general rate increases (GRIs) that are expressed solely as an amount or percentage of the change, says the European Commission.
Shipper representatives have welcomed an agreement by the container lines to abandon GRIs in favour of a new pricing announcement mechanism following a two-year inquiry by the EU into possible competition infringements – alleged “price signalling” – by lines.
The announcement grows out of an EC decision to open formal antitrust proceedings that investigate the practice of publishing GRI announcements and whether carriers engaged in concerted practices in breach of EU antitrust rules in November 2013.
The Commission has concerns that container liner shipping companies' practice of publishing their future price increase intentions may harm competition and customers by raising prices for their services to and from Europe, in breach of EU antitrust rules.
Container liner shipping is the transport of containers by ship at a fixed time schedule on a specific route between a range of ports at one end (e.g. Shanghai - Hong Kong - Singapore) and another range of ports at the other end (e.g. Rotterdam – Hamburg - Southampton). Container shipping accounts for the vast majority of non-bulk freight carried by sea.
Fifteen container liner shipping companies (carriers) have regularly announced their intended future increases of freight prices on their websites, via the press, or in other ways.
The carriers are China Shipping (China), CMA CGM (France), COSCO (China), Evergreen (Taiwan), Hamburg Süd (Germany), Hanjin (South Korea), Hapag Lloyd (Germany), HMM (South Korea), Maersk (Denmark), MOL (Japan), MSC (Switzerland), NYK (Japan), OOCL (Hong Kong), UASC (UAE) and ZIM (Israel).
These price announcements, known as General Rate Increases or GRI announcements, do not indicate the fixed final price for the service concerned, but only the amount of the increase in US-Dollars per transported container unit (twenty-foot equivalent unit, "TEU"), the affected trade route and the planned date of implementation. They generally concern sizable increases of several hundred US Dollars per TEU.
The UK’s Freight Transport Association (FTA) said it “looks forward to more transparency in shipping line prices” following the European Commission’s investigation, which led an announcement today by the Commission proposing the new pricing structure.
Maersk Line, the world’s largest container shipping company, said on Tuesday it would change the way it publishes price changes following a competition probe by the European Union.
Its announcement confirmed earlier reports by Reuters that shipping companies will need to implement measures that would essentially cap their price rises.
