Ministry of Oceans and Fisheries Reviews Establishment of Self-Regulatory Organization for Shipping Market

[Sejong=Asia Economy Reporter Kwon Haeyoung] The Ministry of Oceans and Fisheries is considering a plan to establish a separate organization to manage and supervise unfair practices in the shipping market.

According to the Ministry of Oceans and Fisheries on the 25th, it recently announced a research project titled "Establishment of Related Systems for Order in the Shipping Market." This is due to the need to establish a system including the preparation of work guidelines for managing and supervising the shipping market order, amid the global environmental changes caused by the spread of the novel coronavirus disease (COVID-19), which have led to a surge in container ship freight rates and increased burdens on export companies.

This project aims to specify cases of acts that undermine fair order in the shipping market, establish procedures for handling incidents, set review and disposition standards, and consider the establishment of a "Shipping Market Committee."

A Ministry of Oceans and Fisheries official explained, "Although existing fair trade regulations such as those of the Fair Trade Commission and the Korea Communications Commission can be referenced, their active use is limited considering the characteristics of the shipping industry that allow joint actions," adding, "It is necessary to prepare systematic and detailed regulations covering the entire process from the start of investigations to dispositions to enhance the supervisory agency’s ability to handle tasks."

The noteworthy point is the consideration of establishing the Shipping Market Committee. According to the Ministry, major countries such as the United States strengthen management and supervision by monitoring unfair practices of domestic port shipping companies through dedicated shipping sector agencies. The ministry plans to review the necessary systems, administrative organization, budget scale, and establish adjudication procedures related to the operation of the Shipping Market Committee.

Inside and outside the Ministry of Oceans and Fisheries, it is interpreted that the ministry has begun to consider establishing its own management and supervisory organization after criticism arose that the Fair Trade Commission, which is responsible for judging joint actions such as freight rate decisions by shipping companies, does not sufficiently reflect the unique characteristics of the shipping industry. The Shipping Act stipulates that shipping companies may enter into contracts or joint actions regarding freight rates, vessel deployment, and cargo loading. This follows global norms that recognize the necessity of joint actions among companies for smooth global logistics communication.

This may conflict with the Monopoly Regulation and Fair Trade Act (Fair Trade Act), which views price and bid collusion among companies as illegal. Since 2018, the Fair Trade Commission has been investigating domestic shipping companies such as HMM (formerly Hyundai Merchant Marine), Janggeum Shipping, and Heung-A Shipping for price collusion. This action followed a report in July 2018 that shipping companies on Southeast Asia routes colluded on freight rates, violating the Fair Trade Act.

A Ministry of Oceans and Fisheries official stated, "Regarding the establishment of a separate organization to manage and supervise the shipping market, research will be conducted and consultations with related ministries will follow," adding, "The decision on whether to establish the organization has not yet been made."

This content was produced with the assistance of AI translation services.