CCCS slaps $2.8m fine against 4 warehouse operators over price fixing

The operators imposed an FTX surcharge for warehousing services at Keppel Distripark.

The Competition and Consumer Commission of Singapore (CCCS) imposed a total financial penalty of $2,799,138 against four warehouse operators who have engaged in price-fixing conduct.

In a report, CCCS said  CNL Logistics Solutions Pte. Ltd. (CNL), Gilmon Transportation & Warehousing Pte. Ltd. (Gilmon), Penanshin (PSA KD) Pte. Ltd. (Penanshin), and Mac-Nels (KD) Terminal Pte. Ltd. (Mac-Nels) violated section 34 of the Competition Act 20042.

The four operators imposed, in a coordinated manner, an additional charge known as the “FTZ Surcharge” for warehousing services at Keppel Distripark, said CCCS.

“The parties coordinated the imposition of an identically named FTZ Surcharge at the same price of $6 per w/m on the same type of goods (i.e. import cargo),” reported the CCCS.

“The FTZ Surcharge imposed by CNL, Gilmon and Penanshin was effective from 1 July 2017, and Mac-Nels’ FTZ Surcharge was effective from 1 August 2017. CCCS found that the parties had coordinated their pricing strategies instead of determining them independently,” the commission added.

Due to the price-fixing conduct of the four operators, price competition in the market for warehousing services was restricted.

“The parties knew that independently imposing the FTZ Surcharge could cause their customers to switch warehousing service providers, especially if their competitors did not impose such a charge. The exchange between the Parties of their respective intentions to impose the FTZ Surcharge not only reduced their uncertainty in deciding whether to impose the FTZ Surcharge but also enhanced their negotiating positions in respect of their customers,” the commission said.