FTC first sanction on stevedoring companies in history

The Korea Fair Trade Commission (KFTC) pointed out unfairness in domestic stevedoring companies.
The KFTC Busan branch revealed on January 19 that unfairness in stevedoring companies, i.e. prearranged rates and activities restraints in container dedicated wharves and general wharves that have been in place since last September.
According to the reports released from the KFTC Busan branch, 6 container terminal operating companies including the Pusan East Container Terminal (PECT) and Hyundai Busan Container Terminal (HBCT) conferred stevedoring rates together in their working level meeting four times before they reported it to the government. In their meeting, they agreed to apply a 5% increase to the rates the same as the reported one in general wharves, producing unfair monopolistic pricing and preventing fair competition, insisted the commission.
In 2000, when the container stevedoring rates were liberalized, some stevedoring companies increased the rates. However, as cargoes decreased and the competition among stevedoring companies became more intense, they came to confer together, said the KFTC Busan branch.
The Korea Harbor Transportation Association (KHTA) for stevedoring companies in general wharves, with seven branches across the country including Busan, Masan and Ulsan, pushed not to lower rates for companies, explained the local KNFC.
Accordingly, the local KNFC produced an inspection paper for the KNFC headquarters to charge KRW 2 billion to six container terminal operating companies. The KNFC will decide on the range of restraints and details such as the amount of through the relevant companies?vindication in the middle of this January.
Mr. Jun ?ho Song, manager of the KNFC Busan branch, said, ?Though the Ministry of Maritime Affairs and Fisheries changed rates in the container terminals to a reporting system from the government permission system in order to strengthen competitiveness and to lessen regulations from 2000, prearranged prices made the market monopolistic. For the competitiveness of domestic stevedoring companies, it has to change.?
Terminal operating companies revealed that they couldn?t understand why the KNFC would levy fines as a result of the monopoly because the Pusan container terminal showed very similar facilities, stevedoring, and conditions, resulting in a similar rates system. They would respond with a suit, said the companies.
The KHTA also insisted that because stevedoring rates in the Port of Busan remained at such a low level compared to foreign ports, it would be required to maintain proper ones.
The sanction of the KNFC is against the will of MOMAF to have proper rates from last August in order to prevent rates cuts among the stevedoring companies, said the association.