Press Release
FETTCSA decision a 'wake up' call for the shipping industry says ESC
17 May 2000
Yesterday's decision by the European Commission to impose fines of 7 million ECU on shipping companies in the Europe-Far East trade for 'serious' competition infringements serves as a timely reminder to OECD member states attending next week's OECD maritime regulatory reform workshop of the sort unacceptable business practices employed by the liner shipping industry.
The ESC lodged a formal complaint against the FETTCSA agreement in 1994. FETTCSA was an agreement between members of the Far Eastern Freight Conference and various independent lines that horizontally fixed surcharges in contravention of EC competition rules.
ESC Secretary General Chris Welsh said "the FETTCSA fines set an important legal precedent because it is the first decision adopted by the Commission in relation to the horizontal fixing of surcharges by the liner shipping industry.
This should be a wake up call to the shipping industry that collusion in the fixing of surcharges is viewed as a serious infringement of Community competition rules. We would therefore call upon all ocean carriers to discontinue the practice of imposing blanket surcharges on their customers and to enter into alternative pricing arrangements with shippers."
Mr Welsh said "the ESC remains open to discussions with carriers in establishing alternative best practice arrangements to deal with sudden or extraordinary increases in costs. Such arrangements work effectively in other transport markets and we see no reason why similar agreements could not be made to work in the liner shipping market."
For further information contact: Nicolette van der Jagt, Secretary General of the ESC - Brussels 00 322 230 2113.
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