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.
Maersk Line, part of Denmark’s A.P. Moller-Maersk group, said the way it would now announce changes in its freight rates for shippers wanting to transport goods, would be more transparent.
The EU Commission said on Tuesday that the 15 shipping companies under investigation had promised to be “bound by their price announcements during their validity period as maximum prices but will be free to offer lower prices.”
The shipping industry has been hit by record low freight rates due to sluggish growth in the global economy, especially a slowdown in China.
Shipping companies tend to announce General Rate Increases (GRIs) about a month before they intend to increase spot prices along main routes.
However, in the current market climate these intentions rarely come to pass as overcapacity and low volumes often forces shipping companies to accept lower prices than the “GRIs” they announced.
Nevertheless, the EU Commission said expressing this intention in public so far ahead “may allow the parties to explore each others’ pricing intentions and to coordinate their behaviour”.
The Commission wants firms to announce price changes no earlier than 31 days before the date they are due to come into effect.
The other companies under investigation are Mediterranean Shipping Co (MSC) and CMA CGM, Evergreen Marine , Hapag Lloyd, China Ocean Shipping (Group) Company (COSCO), China Shipping, Hamburg Sud, Hanjin Shipping, Orient Overseas Container Line (OOCL), Mitsui OSK Lines (MOL), United Arab Shipping Company, Nippon Yusen Kaisha, Hyundai Merchant Marine and Zim.
Third parties have a month to provide feedback on the EC proposal before the Commission can accept the offer without any finding of wrongdoing or possible fines. The pledge would be valid for three years for routes to and from Europe.
(Reporting by Sabina Zawadzki; Additional reporting by Foo Yun Chee in Brussels; Editing by Susanna Twidale, Greg Mahlich)