Shipping companies slapped with $$$M fines over unfair haulage fees

The country’s competition regulator has slapped fines on a number of shipping companies for alleged price fixing.
According to the Competition and Consumer Affairs Commission (CCAC), it has ruled unanimously against the Shipping Association of Guyana (SAG) in a price fixing case in a complaint filed against the body by businessman Mahindranauth Jaikarran.

Jaikarran is said to be the owner of JD Transport Services.
He provides haulage service for containers from terminals operated by the members of the SAG.
Jaikarran, in his 2017 complaint to the CCAC, accused the SAG of engaging in anti-competitive behaviour by agreeing to collude to fix rates for the haulage of containers from terminals operated by its membership.
The intentions of SAG were to disrupt the natural market flow to its advantage, Jaikaran argued in his complaint.

The SAG members involved in the issue included Muneshwers Ltd, Demerara Shipping Ltd, John Fernandes Ltd, Guyana National Industrial Company Inc. and Guyana National Shipping Corporation.
The matter was heard by the Commission, chaired by Ronald Burch-Smith, Commissioners Rosalie Roberston, S.C. and Pradeepa Bholanath. Evidence was provided by both the SAG and Jaikarran.
According to the Commission, evidence presented showed that the terminal operators imposed handling fees for the private haulers which is not charged by the SAG members, which gives them “a price advantage vis-à-vis the private hauler, to the extent of the handling fees”.
The Commission, in its findings, stated that “we are satisfied that the 15th July decision of the Shipping Association, and adopted by the five terminal operators, was an agreement within the meaning of Section 20 of the Consumer Affairs Act. It distorted a competitive environment among terminals for services provided by them to consumers generally, that is, to the shipping lines and agents, importers of goods and any person or entity which had the option to exercise choice or influence where their goods were shipped.”

The commission also said that the private haulers had little choice in this matter, but by imposing the agreed rate on them in a concerted manner, the decision distorted competition and gave the shipping association an unfair and unlawfully implemented advantage.
The Commission also ruled that SAG members with immediate effect must terminate the price fixing agreement which is reflected the SAG’s memorandum of 15 July, 2017.

“Each of the five terminal operators is ordered to pay the sum of $3,843,000 within six weeks of the date of the order.”
According to the commission, price fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point.
“This benefits all businesses or individuals that are on the same side of the market involved in the conspiracy, as the prices are either set high, stabilized, discounted or fixed,” the commission explained.
The Competition and Consumer Affairs Commission (CCAC) was established in 2006 and became fully operational in 2010. The commission is an agency of the Ministry of Business.

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