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Shipping companies fined by Korean FTC for collusion

Shipping companies fined by Korean FTC for collusion

SEOUL: A total of nine automobile shipping companies from four countries, including Korea and Japan, have been fined 43 billion won (US $43 million) for illegal collusion.

The Korean Fair Trade Commission (FTC) announced on August 21 that nine operators of automobile shipping services from Korea, Japan, Norway and Chile had engaged in collusion in the bidding for contracts with 13 automobile manufacturers between 2002 and 2012. In bids for contracts with carmakers like GM, Toyota and Volkswagen, the companies had colluded so that the existing contractor would win in each case. The FTC fined the shipping companies and referred eight of them to prosecutors.

The companies implicated include five Japanese firms – Nippon Yusen, Shosen Mitsui, Kawasaki Kisen, Nissan Senyo Sen and Eastern Car Liner – as well as Norwegian companies Wallenius Wilhelmsen Logistics and Hoegh Autoliners. Chilean operator CSAV and Korean shipping firm EUKOR Car Carriers were also subjected to fines.

An investigation by the FTC found that the executives of these firms met in August 2002 and agreed that they would not interfere with contracts already taken by another operator, allowing each company to maintain its existing contracts. To ensure that this would happen, the companies agreed to either refrain from bidding on such contracts or submit a bid with inflated rates. The FTC‘s report found that, “an alliance between maritime shipping companies has existed for a long time, and there was frequent contact between firms for purposes such as sharing vessel space. Even before the 2000s, the companies had agreed not to engage in fierce competition with each other.”

In another case, it was found that Nippon Yusen had colluded with an Israeli firm, ZIM, to raise freight charges by $100 per car on Hyundai Motors vehicles that were being shipped from Korea to Israel between 2008 and 2011.

Prior to this case, the companies had already faced sanctions from Japan, China and Mexico for the same actions, while in the US, Chile and South Africa, investigations are ongoing and some sanctions have already come to an end. In 2015, the Chinese government fined these firms a total of 72.4 billion won (US $72.4 million).