Manufacturers demand action on ‘cartel-type’ shipping charges

The shipping industry must be investigated into allegations of “cartel-like” behavior and rising fees that are causing shortages and fueling inflation, the manufacturers demanded.

MakeUK, the trade body that represents Britain’s industrial base, is asking the Competition and Markets Authority (CMA) to examine whether soaring freight costs can be justified.

It joins an earlier request from the British Chambers of Commerce (BCC) for an investigation as the 100,000 member companies of both groups buckle under soaring shipping prices.

The organizations are preparing an open letter to the CMA calling for “urgent action” to determine whether charges are coordinated or inflated by shipping lines, with many of their smaller members particularly strained by higher costs.

Freight prices have jumped over the past year as disruptions at ports increase the already fierce competition for space on ships.

The average price paid for a 40ft container from East Asia to Europe is $ 15,000 (£ 10,900) according to Freightos, a website that tracks the shipping market – roughly 10 times more high than at the start of the pandemic.

There have been allegations that major shipping companies have engaged in cartel-like behavior, claiming that they have used the race to secure shipping slots to drive up prices.

A report by shipping consultancy Drewry predicts that container shipping companies together will make “surreal” profits of $ 150 billion this year – as much as the previous 20 years combined.

Businesses are feeling the pressure, with product shortages and warnings that shoppers should anticipate their purchases for the holiday season.

A draft of the letter to the regulator from MakeUK and the BCC, seen by The Sunday Telegraph, says: Competition concerns at stake.

Trade bodies have said that an “investigation into anti-competitive or cartel-like practices affecting UK businesses is now becoming more urgent”. They called on the CMA and the government to “work at a sustained pace to discuss evidence of how the shipping market works.”

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