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EC fines car carriers

The European Commission (EC) has fined several ocean carriers engaged in the transport of finished vehicles and automotive parts and components a total of €546M for anti-competitive practices, including alleged collusion on freight rates.

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The fines follow completion of an EC investigation into this sector of the shipping industry, spanning the period between October 2006 and October 2012. The Commission’s report concluded that “five carriers formed a cartel in the market for the deep sea transport of new cars, trucks and other large vehicles, such as combine harvesters and tractors, on various routes between Europe and other continents.”

A statement issued by the EC said the various carriers co-ordinated their prices, allocated customers between themselves, exchanged commercially sensitive information, including on surcharges and their calculations.

In essence, the report concluded: “The carriers agreed to maintain the status quo in the market and to respect each other’s traditional business on certain routes or with certain customers, by quoting artificially high prices or not quoting at all in tenders issued by vehicle manufacturers.’’

CSAV, K Line, WWL-Eukor and NYK Line took the brunt of the penalties, collectively being fined €395M by the Commission. However, as each carrier owned up to the illicit practices, the Commission discounted NYK’s and WWL-EUKOR’s fines by 20%, CSAV’s by 25% and K Line’s by 50%.

K Line’s fine amounted to €39M, which it will book as a extraordinary loss in the fiscal year ending March 2018. “K Line takes this matter seriously and has taken steps to further strengthen its compliance and training programs to ensure compliance with all applicable laws and regulations," the company said in a brief statement.

While Mitsui OSK Lines was involved in the so-called cartel, its willingness to alert the Commission that it existed meant it escaped the financial sanctions.

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