Dive Brief:
- Documents and electronic data were confiscated when South Africa’s Competition Commission launched a raid on five of the the largest container ship operators, reported The Wall Street Journal.
- At issue for companies from Germany, South Africa, Denmark, Switzerland and France are allegations of price fixing.
- Regulators say the companies may have violated South Africa's competition act. Some of the companies told the Journal that they are assisting with the investigation.
Dive Insight:
The major players are accustomed to price-fixing allegations, and such suits rarely amount to major penalties or revelations, so the incidents are a sign of both scapegoating and a rising distrust of the shipping industry as global trade declines.
South Africa's GDP growth has stagnated significantly over the past 5 years, from 3.2% in 2011 to 1.3% in 2015, according to the World Bank, so pointing at collusion between foreign-owned companies is not only easy, but popular. The problem is that freight rates remain at historic lows and the allegations may take years to resolve.
Whether or not the allegations prove true, the incident provides a warning to a consolidating industry that at this time of global economic strain, the world is watching carefully for non-competitive practices — specially now that Hanjin brought an unfavorable light to the industry.
