The US Federal Maritime Commission (FMC) began investigations in August into possible shareholding connections between China Shipping Container Lines (CSCL) and Hong Kong-based Rich Shipping Co. The two companies are suspected of a collusion that enabled CSCL to use Rich Shipping to reduce freight rates, without having to wait the 30 days required of controlled carriers by the 1984 US Shipping Act.
Controlled carriers – ocean common carriers owned or controlled by a government – are required under US law to give 30 days notice of any freight rate changes on USlinked trades. A non vessel-operating carrier, such as Rich Shipping, has, under US law, no timeframe parameters, and may change its rates without notice.
Both CSCL and Rich Shipping were given until August 26 to comply with an FMC order to furnish shareholding information. If a link is proven, CSCL could lose its controlled carrier status and its US tariff provisions and face heavy fines. Rich Shipping, which has recently been expanding its trans Pacific business, could even be shut down, according to industry sources. CSCL said it would make every effort to address the FMC order. Sources at Rich Shipping in Beijing denied any shareholding connections.