A group of leading nations is to cooperate to keep watch on any potential anti-competitive behaviour in soaring container markets.
The US, UK, Australia, Canada and New Zealand — collectively known as Five Eyes — said they will monitor shipowners worldwide in the light of disruption in supply chains.
Competition authorities in the countries will focus on “illegal conduct, including collusion,” they said.
They are concerned that disruption has led to much higher freight rates and more expensive goods for consumers.
“The global freight supply chain is a complex network involving many jurisdictions, so naturally detecting anti-competitive conduct requires strong international partnerships,” said Australia Competition and Consumer Commission (ACCC) chair Rod Sims.
“Covid-19 has caused the supply chain disruptions the world is currently experiencing, but the purpose of this working group is to detect any attempts by businesses to use these conditions as a cover to work together and fix prices,” he added.
He pledged to share intelligence to identify any behaviour that restricts or distorts competition.
“Companies are now on notice that the ACCC and its international counterparts will be ready to act,” Sims said.
Freight rates on key global trade routes are currently about seven times higher than they were two years ago.
“Australia is an open, trade-exposed economy, and like the other international agencies in this working group, we have a very strong interest in preserving strong competitive markets for global trade,” Sims added.
The working group will be watching for any cartel-like behaviour, or “exclusionary arrangements by firms with market power,” the ACCC said.
Agreements already in place
The deal complements a number of existing formal and informal cooperation agreements with competition agencies in the five countries.
In April 2019, the ACCC signed a cooperation agreement with the FBI in the US to combat cartels and other anti-competitive behaviour.
In September 2020, the Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities (MMAC) was established by the US Department of Justice, US Federal Trade Commission, the UK Competition and Markets Authority, the New Zealand Commerce Commission, the Competition Bureau Canada, and the ACCC.
In recent years it has been car carrier owners under the price-fixing spotlight, with a number of fines imposed around the world for historic abuses of competition law.
SCFI down, charter rates up
Last week the Shanghai Containerized Freight Index (SCFI) eased a further 0.7%, its fifth straight weekly reading of declines.
Each of these falls has been less than 1%, however.
And Clarksons Platou Securities said charter markets remain active.
The group’s container desk has noted that demand continues to outstrip available ship supply across all sizes.
The investment bank is assessing 12-month rates for 4,400-teu vessels at a record $120,000 per day, up from $116,500 last week.