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Pacific shipping probed
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September 22, 1998: 6:53 a.m. ET
Importer complaints spur U.S. to examine possible price gouging
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NEW YORK (CNNfn) - Federal regulators are investigating shipping lines that move cargo to the United States from Asia for possible price gouging.
The Federal Maritime Commission, the U.S. agency responsible for overseeing maritime regulation, said late Monday it was reacting to "numerous reports" from importers and freight consolidators "of ocean carriers selectively refusing to provide space for cargo unless the shipper agrees to various forms of carrier demands for substantial rate increases or additional charges."
The complaints and the investigation come in during the busy season for shipping on the Pacific. Through late summer and early fall U.S. manufacturers and retailers are stocking inventories in anticipation of the holiday season. That effort creates a high demand for ship space coming from Asia. Recent currency fluctuations putting the dollar at highs against some Asian currencies has added to that import demand.
Shipping lines, which are allowed to collude on prices, may have used the sudden surge in demand to increase freight rates for particular customers, the commission suggested.
"The entire Commission is very concerned about these reports, which allege potentially unlawful activity on the part of the carriers at this peak shipping season," said Harold Creel, chairman of the commission. "While this proceeding may ultimately result in prosecutions, our immediate aim is to put a stop to any such unlawful practices."
After the investigation is conducted, the commission will review the evidence gathered and decide on a course of action.
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