Soaring shipping costs spark call for competition probe

Freight prices soar by over 500pc, prompting importers and exporters to warn of price inflation and product shortages

One of Britain’s top business groups is joining calls for the competition watchdog to investigate the shipping industry over soaring container costs.

The British Chambers of Commerce (BCC) will weigh in with a letter to Competition and Markets Authority boss Andrea Coscelli, calling for a “formal investigation” into the operations of international shipping and sea freight markets.

Last week, the watchdog confirmed it was examining price increases that are are being tied to shortages and inflationary pressures, but it has not launched a formal investigation.

Global freight prices have risen drastically amid supply disruptions and increased demand, with the spot price of transporting a standard 40ft container from East Asia to Europe soaring from about $2,000 to at least $13,000 before additional surcharges and tariffs are taken into account.

The BCC, which leads a network of regional chambers representing ten of thousands of businesses, said its members were reporting concerns over high costs and a lack of container availability.

Industry experts and businesses have warned the situation is causing price inflation and product shortages, which are likely to worsen over the coming months.

The group’s letter, a draft version of which has been seen by The Telegraph, reads: “There is little sign of any imminent market correction leading to structural problems with the market in sea freight from Asia-Pacific in our view.”

It adds: “Given the continuing nature of the disruption, we believe the time is right for the CMA to launch a full investigation into this market’s impact on UK businesses to review both the quantitative and qualitative evidence outlining the disruption shipping costs and availability are having for UK businesses.”

Some businesses have accused shipping companies of behaving like a cartel, alleging that they are effectively price-gouging.

James Hookham, a spokesperson for the Global Shippers’ Forum, a trade body representing importers and exporters, said the behaviour of shipping lines was “clearly becoming profiteering”.

Brussels rolled over special competition rules applying to shipping companies last year. The UK adopted the rules as part of Brexit, meaning the exemptions will remain in place until 2024. The rules allow shipping operators with a total market share of less than 30pc to co-operate closely to provide joint liner shipping services.

Shipping industry representatives said the rises were a product of supply and demand, and that carriers are working to support their customers.

Bob Sanguinetti, chief executive of the UK Chamber of Shipping, the trade association of the UK shipping industry, said: “Due to capacity issues there has been a shortage of containers around the world, driving up the price of moving goods. We are engaged on this issue through the Government’s freight council and will continue to work closely with them to help adjust or reduce the pinch points wherever possible.”

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