China Shipping Container Lines

Shipping line pays penalty to settle complaints

PUBLISHED : Friday, 28 November, 2003, 12:00am
UPDATED : Friday, 28 November, 2003, 12:00am

China Shipping Group's dedicated container line yesterday paid a US$1.85 million penalty to settle complaints it had breached regulations governing marine trade in the Pacific.

China Shipping Container Lines (CSCL) agreed to settle complaints lodged with the United States Federal Maritime Commission that it had undercut market freight rates, falsely classified commodities and allowed non-signatory shippers access to service contracts.

'It also was alleged China Shipping ... [provided] transportation not in accordance with its published tariff, and ... [entered] into service contracts with, and providing transportation services to, ocean transportation intermediaries that did not have tariffs, licences or bonds as required by the [Shipping] 1984 Act,' the commission said.

'In compromise of these allegations, China Shipping made a payment of US$1.85 million.'

The CSCL penalty was the lion's share of the US$2.13 million in penalties the commission handed down yesterday.

Historically, the commission allows companies against which complaints are lodged to pay 'compromise' penalties in absence of a plea.

CSCL executives in Shanghai declined to comment yesterday.

The carrier, the mainland's No2 shipping line, has aggressively expanded its fleet since its inception in 1997 and is behind last month's order of the world's biggest containerships, 9,500-teu (20-foot equivalent unit) behemoths from South Korea's Samsung Heavy Industries. Its box ship fleet has grown to more than 100 vessels in just six years.

According to a shipping conference source, executives have on more than one occasion appealed to CSCL management to show some discipline in the rates it offers to carry inter-continental boxes, particularly on transpacific trades.

Its critics argue the carrier exploits the deep pockets of its parent to buy vessels and gain market share.