NMa Suspects Road Transport Companies of Price Agreements for Ocean Container Transport
Following an investigation, the Netherlands Competition Authority (NMa) has drawn up a report on three large organisations in the transport sector because NMa suspects them of issuing recommended prices. This relates, in particular, to members active in road transportation of ocean containers. More than half of the ocean containers landed in Rotterdam, the largest container forwarding port in Europe, are transported by road.
Recommended prices issued by branch organisations are regarded as a form of price agreement between the members of the organisations and are therefore prohibited. Such agreements result in higher prices (transport tariffs) and a reduced incentive to save on costs. Companies are required to determine their commercial behaviour, including their prices, independently of each other. They are required to compete for the favour of customers without mutual agreements or coordination by the branch association. If they do make agreements that restrict competition, these are to the detriment of buyers.
It appears from an investigation carried out by NMa that the branch organisations Transport en Logistiek Nederland (TLN), Alliantie Zeecontainervervoerders (AZ) [Alliance of Ocean Container Transporters] and Vereniging van Zeecontainervervoerders (VZV) [Association of Ocean Container Transporters] have given their members advice with regard to passing on price increases for road transportation of ocean containers. TLN and AZ provided their members with information on cost trends in the ocean container transport sector together with a recommendation to adjust cargo prices. TLN, AZ and VZV advised their members to use a fuel clause to pass on fluctuations in fuel prices. TLN and AZ advised their members to pass on the cost increases resulting from a kilometre levy. The recommendations were issued in various ways: in letters, publications, model clauses and at cost-price meetings at which instructions were given.
Joint recommendations with regard to prices or price increases, whether or not these are actually implemented, make it possible to predict what the pricing policy of competitors will be with a reasonable degree of certainty. This results in standardisation of tariffs. The majority of companies which transport ocean containers are affiliated to these branch organisations. The incidents which have been investigated occurred in the period from 1 January 1998 up until the present.
NMa has a reasonable suspicion that the organisations have contravened the Competition Act. For this reason, a report has been drawn up. The organisations involved have now been given an opportunity to respond to the report. After this, NMa will take a final decision on whether an infringement has been committed and, if so, whether a fine or a different sanction will be imposed.