Fair Trade Commission imposes fines on 6 operators for 'port cargo handling bid rigging'

[Asia Economy Sejong=Reporter Dongwoo Lee] The Fair Trade Commission has identified collusion among six stevedoring operators, including CJ Logistics, in the bids for port stevedoring services at Gwangyang and Pohang ports conducted by POSCO, and decided to impose fines totaling 6.5 billion KRW.

According to the Fair Trade Commission on the 14th, the six operators agreed in advance on volume allocation, bid prices, and winning order in the bids held annually by POSCO from 2016 to 2018 to select port stevedoring service providers. These services include unloading iron ore from ships docked at the port, loading export steel products onto empty ships, and dock transportation work.

Five companies?Dongbang, CJ Logistics, Sebang, Daeju Enterprise, and Somo Holdings & Technology?participated in the collusion for the Gwangyang port bids. For the Pohang port bids, Dongbang, CJ Logistics, and Hanjin led the collusion.

After the bid briefing sessions held around May to June each year for Gwangyang and Pohang ports, they held several meetings and agreed to allocate stevedoring volumes at levels similar to the previous year's volume shares. They also predetermined the winning order and bid prices for each bidding unit according to the agreed volume allocation.

POSCO had long selected port stevedoring service providers through long-term private contracts but introduced a competitive bidding system starting in 2016. The stevedoring companies judged that failure to maintain existing volumes would make it difficult to recover investments in related facilities and manpower, leading to the collusion in this case.

Additionally, since the contract price was determined by the first-place bid price under the bidding structure, most stevedoring companies had no choice but to sign contracts at prices lower than their own bids. Accordingly, the stevedoring companies reached a consensus to prevent contract price declines caused by price competition through collusion.

The Fair Trade Commission decided to impose corrective orders and provisional fines totaling 6.53 billion KRW on six operators: Dongbang (2.202 billion KRW), CJ Logistics (1.02 billion KRW), Sebang (986 million KRW), Daeju Enterprise (795 million KRW), Somo Holdings & Technology (848 million KRW), and Hanjin (679 million KRW).

A Fair Trade Commission official explained, "The Fair Trade Commission has continuously detected and sanctioned bid rigging related to land transportation of steel products such as coils, thick plates, and wire rods ordered by POSCO. This action is significant in that it sanctions bid rigging activities in the adjacent market of port stevedoring."

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