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Thu, 23 October 2014 17:39:00
Sri Lankan exporters cheer Indian clampdown on shipping cartels
19 Sep, 2007 05:18:51
Sept 18, 2007 (LBO) – India's Competition Commission is moving against an alliance of shipping lines which control most of the cargo shipped from south Asia, including Sri Lanka, to Europe but which shippers have accused of acting like a cartel.
The India-Pakistan-Bangladesh-Ceylon Conference (IPBCC), one of the oldest shipping conferences in the world, controls about 75 per cent of the traffic between India and Europe, the Competition Commission of India (CCI) said.

Shipping lines operate in groups called conferences.

In a letter to the Shipping Ministry, the CCI pointed out that the IPBCC fixes freight rates and other charges like terminal handling charge (THC), bunker adjustment factor (BAF), and currency adjustment factor (CAF), which is followed by its members, and also becomes a standard for non-members.

The Competition Commission has asked India's Shipping Ministry to take steps to curb such practices to safeguard the interests of Indian exporters.

The move has been welcomed by Sri Lankan shippers who have long complained of price fixing by shipping lines operating through Colombo, a charge the lines have denied.

Sri Lankan shippers said they were checking on the reports of Indian action and that they would be pleased with any action to curb anti-competitive practices that create difficulties for exporters.

They point out that price fixing by shipping lines increases the costs of exports and imports.

The Sri Lanka Shippers Council and freight forwarders have waged a long campaign against the THC imposed by lines operating through Colombo and have demanded government intervention and an all-inclusive freight charge.

The lines reject price fixing charges and maintain they are only recovering costs incurred in shipping cargo from Colombo.

India's Competition Commission member Vinod Dhall has told Indian media that India’s new competition law, the Competition Act, 2002, provides for no exemption for shipping conferences.

"It regards cartels as a very serious violation and (such a practice) is presumed to be anti-competitive,” Dhall said.

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