EU Antitrust Shipping Probe Includes COSCO, Hanjin

China's COSCO and South Korea's Hanjin Shipping are among 14 container shipping companies under an EU investigation for allegedly influencing prices for European routes, two people with knowledge of the matter said.

The European Commission opened a probe into the group last month for appearing to alert each other of price increases via press releases and on their websites, saying they may be acting in concert in breach of competition rules.

The investigation, which could lead to formal charges and fines of up to 10 percent of a company's global turnover, comes as the global industry struggles with an excessive number of vessels and weak demand due to the economic downturn.

Container ships transport consumer goods such as electronics and food in metal boxes, with a standard length of 20 feet.

Consultancy Alphaliner said a negative decision could be highly detrimental for the sector by curbing "the avenues for communicating future price increases and prevent carriers from implementing uniform rate hikes simultaneously".

The European Union competition watchdog did not identify the companies, in line with its usual policy. But the two biggest container line operators AP Moller Maersk and Mediterranean Shipping Company both said last month on the day of the EU announcement that they were under investigation.

Taiwan's Evergreen Marine, Germany's Hapag-Lloyd and CMA CGM, which is the third-biggest operator, all confirmed on Thursday they were included in the probe.

The sources said the group also includes South Korea's other top shipper Hyundai Merchant Marine,China Shipping Container Lines and Japan's No. 1 Nippon Yusen Kaisha and No. 2 Mitsui O.S.K. Lines.

The others are Hong Kong-based OOCL (Orient Overseas Container Line), United Arab Shipping Co(UASC) and Israeli company Zim Integrated Shipping Ltd, they said.

A spokeswoman for Zim declined to comment. Officials at COSCO, China Shipping Container Lines, Nippon, Mitsui, Hanjin, Hyundai and UASC could not immediately be reached for comment

"Prima facie evidence suggest that the EC (European Commission) may have a case against the carriers for price signaling," Alphaliner said.

According to Alphaliner data, carriers on the benchmark Asia-to-Europe route have announced at least 34 rate increases since 2009. In most cases, the timing and amounts of increases were largely similar for the main carriers, with announcements made by lines within a few days of each other.

Although carriers in some instances varied the rate increases by $25 to $100 per teu (20 foot-equivalent unit), their pricing could still come under the Commission's ambiguous 'concerted practices' rules as tacit collusion, which does not require an explicit agreement to fix prices, Alphaliner said.

Analysts expect further headwinds next year for the container shipping industry, with no respite from depressed rates.

By Foo Yun Chee and Jonathan Saul (C) Reuters 2013.