Yang Ming and HMM Were Accused of Collusion to Prop up Freight Rates
MSRF, a gourmet food producer, has filed a complaint with the Federal Maritime Commission in the US against the carriers HMM and Yang Ming. In the complaint, MSRF has accused Yang Ming and HMM of not honoring their long-term shipping contracts, denial of service, and collusion to manipulate prices.
MSRF states that ocean carriers are denying service to shippers in a concerted effort to keep the shipping prices propped up. In their complaint, they state that in 2019 a container that would cost them around $ 2700 now costs around $ 25,000 on the spot market, and the price has not come down even two years after the onset of the pandemic. They stated that Yang Ming only shipped 4 out of the 100 TEU, and HMM shipped 9 out of the 25 TEU which they were contractually obligated to ship, accusing the carriers of auctioning off the capacity to the highest bidder in the spot market. MSRF has stated that such violations by these ocean carriers have caused them over $ 2.2 million in damages, which is still accruing mainly due to them going to the spot market to avail of the same service at a much higher price.
This complaint comes within a few weeks of a two-year investigation report published by the Federal Maritime Commission regarding the effects of the pandemic on liner operations. The report essentially states that the American consumer demand was the cause of the supply chain issues and hence the heightened prices. The report also noted that the pacific market was fragmented, preventing antitrust activities such as collusion to manipulate prices.