The European Commission has accepted commitments made by 14 container shipping companies to increase price transparency and reduce the likelihood of coordinating prices.
The shipping companies currently announce general rate increases (GRI), on their websites. GRI give an indication of how much the company expects the price to rise and announcement are usually made three to five weeks before their implementation date. Since they can be changed at any time, the Commission said that this makes it easier for the companies to align their prices. The EC added that the system does not give full information to customers, and also makes it possible to coordinate prices
without the risk of losing customers. This is likely to lead to higher prices, and harm competition, it said.
The shipping companies have agreed to stop publishing GRI announcements. Future price announcements will include at least five elements of the total price: base rate, bunker (fuel) charges, security charges, terminal handling charges and peak season charges, where applicable. The price announcements will be binding as maximum prices, although the companies can offer lower prices, and announcements will not be made more than 31 days before the prices come into force. The EC said that this corresponds to the period when customers usually start booking in significant volumes.
The commitment will not apply when companies are communicating with buyers who already have an existing rate agreement in place for a route, or during negotiation or communication with specific identified customers..
The commitments will be legally binding for a period of three years starting from 7 December 2016.
Commissioner in charge of competition policy, Margrethe Vestager, said: “Container shipping accounts for the vast majority of the non-bulk freight carried by sea to and from Europe. Competitive shipping services are therefore essential for European companies and for the EU’s economy as a whole. The commitments offered by 14 carriers will make prices for these services more transparent and increase competition”.