Maersk and CMA CGM under investigation for allegedly raising freight rates

After a year in which global carriers reported sharp earnings growth, regulators are beginning to focus on sharp increases in ocean freight rates in 2021 .

The COMESA Competition Commission announced that it has opened an investigation into two shipping companies serving Africa, Maersk and CMA CGM, as well as United Africa Feeder, accusing them of colluding to increase rates and violating trade competition laws .

The COMESA Competition Council, which began operations in 2013, is the first regional competition authority in Africa and the second in the world after the European Competition Authority.

COMESA is a 21-member country serving ports from Tunisia to South Africa. The common market includes 580 million people and covers nearly two-thirds of the African continent.

In a formal notice of investigation , COMESA said the commission noted that shipping lines had published price announcements that may have violated regulations, inviting stakeholders to submit representations on the allegations by April 30, 2022.

The Commission said it had preliminary concerns that the price announcements by shipping lines were being published in the form of coordinated or concerted conduct. As a result, the Commission reported that it would assess the degree of compatibility of the price announcements with common market regulations.

The Regulation prohibits all agreements which may affect trade between Member States and have the object or effect of preventing, restricting or distorting competition. In addition, the Regulation prohibits agreements or arrangements between competitors which, among other things, allocate customers and markets within the common market.

Competition Commission chief executive Willard   Mwemba said it was investigating the prices of these shipping companies, which if not checked could have a negative impact on consumers, and they were looking into why shipping companies increased freight rates in a short period of time.

COMESA is particularly sensitive to the influence of international companies on its common market. As part of its 2025 strategic plan, COMESA is encouraging member countries to set up their own shipping companies , and the group is studying the feasibility of establishing a route to the Indian Ocean archipelago .

The investigation in Africa follows similar investigations in the United States , Europe and Oceania . Earlier, the competition commission agreed to share information, while the US Department of Justice, at the direction of the Biden administration, said it would enforce existing antitrust regulations against shipping alliances. Similar to the African investigation, a US congressional subcommittee has also launched an investigation into the freight rates and pricing policies of large carriers.

Maersk

CMA CGM