“No matter the amount, there is absolutely no fine”… What is the intention of shipping companies’ ‘reckless’ protest ahead of the Fair Trade Commission sanctions?

Association holds press conferences one after another
Repeatedly insisting on “legitimate joint action”
“No fines regardless of the amount”
Inside, “I’m afraid that the Chinese shipping company will lose the market”
Joint action is the ‘survival platform’ of shipping companies

Cargo being loaded onto a shipping vessel. Hankyoreh file photo

Is the Fair Trade Commission a joint act of shipping companies? “Never received” (Fair Commission claim) – “Allowed under the Shipping Act” (Shipping company claim) Is there any restrictions on entry and exit of shipping companies? “Restricted” – “Not restricted” Whether to report to the Ministry of Oceans and Fisheries in case of joint action? “Irresponsible to report 122 times” – “Not subject to report” What is the conclusion? “Unfair joint action” – “Legal joint action” This is a summary of the data distributed by the Korea Shipping Association during a press conference on behalf of shipping companies that are about to be sanctioned by the Fair Trade Commission for joint action (Jjamjami) on the 3rd. For each major item, the ‘contents of the Fair Trade Commission’s review report’ and the shipping company’s position were reversed. It is interesting that the side receiving the sanctions discloses the contents of the Fair Trade Commission review report to the media, and the conclusions of the two sides are diametrically opposite. Regarding the impact of the passage of the amendment to the shipping law, “encouragement of illegal shipping by shipping companies. Increased burden of logistics costs” “Distortion of facts. It is impossible to increase the fare due to a joint action.”
■ “Unfair joint action” – “Legal joint action” During the press conference, he said, ‘If the shipping company insists, isn’t the FTC’s investigation into shipping company collusion completely misinterpreting the provisions of the law or ignoring the law and an act of abuse of authority? Shouldn’t we be accusing the FTC officials instead of playing the media?’ Kim Young-moo, vice president of the Korea Shipping Association, said, “It’s hard to say that… However, it is clear that the FTC did not understand the characteristics of the shipping industry… ” he muttered. He continued, “In any case, the imposition of a fine by the Fair Trade Commission, regardless of the amount, is absolutely unacceptable. We will respond with a lawsuit.” In general, companies’ responses to unfair practices by the Fair Trade Commission focus on lowering the level of sanctions, such as lowering the amount of fines or preventing prosecutions. However, the response of shipping companies is close to ‘reckless’. Despite the fact that the Fair Trade Commission has already completed the fact-finding and the parties’ opinion investigation and is about to make a trial decision at the plenary session, it still does not bend the assertion that “the investigation itself is wrong.” Earlier in May, the Fair Trade Commission sent out a review report sanctioning 23 domestic and foreign shipping companies on charges of fixing freight rates on Southeast Asian routes, and the shipping companies have argued that “joint action is an exemption clause under Article 29 of the Shipping Act”. After the press conference that day, he met with officials from the Shipping Association and domestic shipping companies separately and continued to ask, ‘Why are you reacting so sensitively to whether the Fair Trade Commission imposes a fine?’ Vice Chairman Kim Young-moo said, “If a fine is imposed regardless of the amount, a correction order will follow. It is not that we are sensitive to the fine, but we are concerned about the aftermath of the corrective order.” He said, “After the Fair Trade Commission issues a corrective order, the implementation of the corrective order will be monitored. . In fact, the bigger problem is that when the Fair Trade Commission issues a corrective order, all of the routes between Japan and Korea, China and Southeast Asia, which are the main markets of small and medium-sized domestic shipping companies, have no choice but to be surrendered to the Chinese shipping companies.” An official from a shipping company said, “Even though the shipping companies’ performance has improved unprecedentedly due to the increase in cargo volume and freight rates after the COVID-19 pandemic, the stock prices of shipping companies are not rising. The listing of SM Merchant Marine was even frustrated. It is analyzed that this is due to uncertainty regarding the aftermath of the Fair Trade Commission sanctions and the post-COVID-19 situation.”
■ What is really scary is a correction order, not a fine Combining the explanations of Vice Chairman Kim and shipping company officials, small and medium-sized domestic shipping companies have been able to occupy half of the fleet capacity of Southeast Asian routes such as Korea and China thanks to the ‘joint action’. Despite opposition from Chinese shipping companies, the joint action system was maintained thanks to the efforts of the Korean government and shipping companies, which enabled small and medium-sized domestic shipping companies to survive. Vice Chairman Kim said, “The Korea-China shipping council adjusts the capacity ratio of Korean and Chinese shipping companies, but Chinese shipping companies, which are far ahead in price competitiveness, oppose the joint action. It is clear that they will come out to break the structure of joint action. Then Chinese ships will come to every major port in Korea, such as Incheon, Gunsan, Mokpo, and Busan,” he explained. He continued, “In terms of price competitiveness such as labor cost, Korean shipping companies do not have the ingenuity to compete with Chinese shipping companies. “This is the situation that Korean shipping companies are most concerned about regarding the FTC sanctions,” he added. It is also true that there is a big difference in the position of shipping companies. HMM (HMM), a large ocean shipping company, said, “The main focus is on long-distance routes such as the Americas and Europe, so we do not care much about the FTC sanctions.” An official from SM Merchant Marine, which was launched by inheriting the manpower and shipping assets of the former Hanjin Shipping, said, “The main focus is on the West Coast route in the US, and future plans are also focusing on long-distance routes such as the East Coast of the Americas. As the proportion of short-distance routes is not large, I do not care much about it.” A shipping industry official, who was reluctant to reveal his name, said, “Among domestic shipping companies, shipping companies with a large proportion of routes to Southeast Asia, such as Janggeum Merchant Marine and Korea Shipping, are expected to take a big hit. Since the other party is the Fair Trade Commission, it is difficult to come forward directly, so I see it as speaking out with the association at the fore.”
■ If the Blue House would step forward… Consent resolution review The reason behind the ‘loud voice’ of the Shipping Association is also the intention to order the Blue House mediation. A shipping company official said, “One of the major achievements of the Moon Jae-in government is the reconstruction of the shipping industry. It is also true that the Blue House has expectations that the Fair Trade Commission sanctions can be overridden in order to put this in the forefront,” he said. Another official in the shipping industry said, “I understand that applying for a ‘consent resolution’ is being considered as a way to avoid the imposition of fines and correction orders while respecting the results of the FTC investigation.” The resolution of consent is a system in which the FTC judges the feasibility and promptly closes the case without determining whether it is illegal if the business subject to the sanctions proposes a way to recover the problem or to relieve the damage of the consumer or the counterparty. By Kim Jae-seop, senior staff reporter [email protected]



Reference-www.hani.co.kr

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