Ocean Carriers — Price Fixing Concerns

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

Last week, the offices of several major Ocean Carriers in the shipping industry were raided by European Union officials. The reason for the unannounced visit was suspicion of price fixing. According to an article from The Journal of Commerce:

"ST European Union antitrust officials raided the offices of leading ocean container carriers, including Maersk Line, today as part of an investigation into suspected price and capacity fixing in liner shipping...The European Commission, the EU's executive wing, said it 'has reason to believe the companies concerned may have violated the antitrust rules that prohibit cartels and restrictive practices and/or abuse of a dominant market position.'"

One has to ask -- why are we seeing this behavior across the transportation industry?

The answer isn't simple, but it's easy enough to understand, especially if you're a procurement specialist of any kind. Collusion and price fixing is made easier in those industries that lack pricing transparency and therefore foster complex purchasing and contracting processes.

The transportation industry is a case in point. While legal ramifications may stifle this behavior, the real way to eradicate it is for shippers to gain the pricing and contracting insight that forces transparency. A level playing field for shippers -- and carriers -- will bring a much-needed layer of honesty to the transportation procurement process.

-- John Haber, EVP of Transportation, NPI

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