On November 15th, the National Development and Reform Commission announced that, based on the investigation of suspected monopolistic behavior in Shanghai Port and Tianjin Port, the National Development and Reform Commission, together with the Ministry of Transport and the China Port Association, jointly held a meeting on September 22nd, requiring 39 coastal ports across the country to conduct self inspection, self correction, and practical rectification based on the issues found in this antitrust investigation, and requiring port enterprises to fully understand the importance of fair competition, Promote port production and operation to reduce costs and increase efficiency, and better serve the development of the real economy.
Among them, the rectification plans for 19 ports above designated size were submitted to the National Development and Reform Commission for review. From the current self inspection and self correction situation reported by ports, it can be seen that most ports have a deep understanding, conducted comprehensive self inspections, and formulated practical and feasible rectification measures.
The 21st Century Economic Report reporter learned that this rectification is due to reports from mid April this year, and the National Development and Reform Commission has conducted antitrust investigations against Shanghai Port and Tianjin Port in accordance with the law.
This investigation has found that some port enterprises are suspected of violating the Anti Monopoly Law, mainly including: restricting shipping companies from using tugboat, tally, shipping agency and other services provided by local subsidiaries; For non competitive local foreign trade container loading and unloading services, charging much higher loading and unloading operating fees than competitive international transit containers; Attach unreasonable trading conditions such as mandatory unpacking and tallying, non competition clauses, and loyalty clauses to trading partners. These behaviors exclude and restrict market competition, affect a fair competitive business environment, lead to high prices of related services, and increase the operating costs of the real economy.
Most port enterprises attach great importance to this antitrust investigation and have carefully formulated rectification plans.
Major ports such as Shanghai Port, Tianjin Port, Ningbo Zhoushan Port, and Qingdao Port have comprehensively standardized relevant issues and significantly reduced the level of foreign trade container loading and unloading fees; Tangshan Port, Huanghua Port, Weihai Port, Rizhao Port, Lianyungang Port, Beibu Gulf Port and other ports have also formulated rectification measures for the relevant issues identified through self inspection. These measures mainly include:
One is to fully open the tugboat, tally, and shipping market. Ports should fully respect the autonomy of shipping companies and their shipping agents in selecting tugboat companies, and create conditions for fair competition among tugboat companies. Abolish the memorandum or agreement on the division of the tallying market, and do not restrict any tallying company from conducting business at ports. Shipping companies shall choose their own tallying companies. In terms of shipping agency, ports will also have smooth channels to allow and encourage shipping companies to submit ship information through channels outside of their subsidiaries.
The second is to reasonably reduce the loading and unloading fees for foreign trade import and export containers. Shanghai Port, Tianjin Port, Ningbo Zhoushan Port, and Qingdao Port will reduce the loading and unloading fees for foreign trade import and export containers starting from 2018, with a reduction of about 10-20%. This can reduce the import and export logistics costs by approximately 3.5 billion yuan per year. Taking a 20 foot container as an example, Shanghai Port will reduce its current price from 595.5 yuan/container to 480 yuan/container, with a decrease of 19.4%; Tianjin Port will reduce its current price from 530.3 yuan/box to 470.3 yuan/box, with a decrease of 11.3%; Ningbo Zhoushan Port will reduce its current price from 620.53 yuan/box to 490 yuan/box, with a decrease of 21%; Qingdao Port will reduce its current price from 575 yuan/box to 480 yuan/box, with a decrease of 16.5%.
The third is to immediately abolish and clean up relevant unreasonable trading conditions. The port will cease the practice of using unpacking and tallying as a prerequisite for shipping companies to pick up containers. The shipper will decide whether to proceed with unpacking and tallying at their own discretion, and terminate the contract terms that require shipping companies to promise not to engage in competitive business and prioritize the use of services from local subsidiaries. At the same time, terminate the contract terms that require shipping companies to use this port as a transit port and ensure that the freight rates of this port are not higher than those of other ports, promoting fair competition between ports.
Next, the National Development and Reform Commission will urge relevant ports to effectively implement rectification measures, restore fair competition market order, and enable ports to better serve the development of the real economy. At the same time, we will continue to strengthen law enforcement supervision, investigate and verify the self inspection and self correction situation of some ports, and ensure that the production and operation behavior of the entire industry is comprehensively improved. At the same time, we also welcome relevant parties to promptly report to us through the 12358 price supervision platform and other means that there are suspected violations of the Anti Monopoly Law in port production and operation, in order to safeguard our legitimate rights and interests.
The National Development and Reform Commission, in conjunction with relevant departments, will continue to strengthen law enforcement supervision, urge coastal port enterprises across the country to strictly comply with the requirements of the Anti Monopoly Law, regulate their production and operation behavior, effectively protect a fair competition market environment, and adapt to the needs of opening up to the outside world and economic development. We also welcome relevant parties to strengthen social supervision and promptly report and report suspected violations of the Anti Monopoly Law in the production and operation of port enterprises through the 12358 price supervision platform and other means, in order to safeguard our legitimate rights and interests.
Background information:
What are the suspected monopolistic behaviors of the port this time?
Firstly, require shipping companies to use tugboat, tally, shipping agency and other services provided by local subsidiaries. Tugboats, tallying, and shipping agents are some auxiliary services required for ships to dock and load and unload at ports, and the market was originally open. However, during the investigation, it was found that ports restrict or indirectly restrict shipping companies to only accept services provided by port affiliated enterprises by signing format contracts, not opening information ports, and dividing markets for different companies.
For example, in the field of tugboats, some ports sign contracts with shipping companies that include standard terms for services provided by port affiliated enterprises; Some ports do not have the option of setting up tugboat companies in the ship information declaration system, essentially depriving shipping companies of their free choice over tugboat companies. In terms of tallying, some ports do not allow non affiliated enterprises to enter the ports for business, while others directly divide the market for tallying companies. In terms of shipping agency, some ports do not open information ports in domestic trade, transit, and other fields, making shipping companies only able to choose port affiliated enterprises. These practices completely exclude competition in the relevant service market within the port, and are suspected of constituting restricted trading behavior, leading to high prices of related services and unreasonably increasing the operating costs of the real economy.
Secondly, for non competitive local foreign trade container business, the loading and unloading operation fees are much higher than those for competitive international transit containers. Overall, foreign trade containers transported at ports can be divided into two categories: one is based on the port as the origin or destination, which can be referred to as local containers; There is another type of container that is transshipped at a port and transferred to another port, which can be called an international transshipment container. For ports, there are significant differences in cost and competitive conditions faced by these two types of containers. From a cost perspective, international transit containers have relatively high costs due to their higher loading and unloading times; The cost of local containers is relatively low. Therefore, during the government pricing period, the loading and unloading costs of international transit containers were priced high. However, from the competitive conditions faced, local containers are limited by transportation distance, making it difficult for cargo owners to choose other ports for transportation, and the competitive constraints faced by ports are very small; For international transshipment containers, there is no need to consider the distance between the port and the final destination of the goods. There is little difference in transshipment between different ports, and the competitive environment faced by ports is very fierce, even facing competition from neighboring countries' ports.
The survey shows that due to different competitive environments and pressures, many coastal ports have adopted different pricing strategies for two types of container loading and unloading costs. Although the loading and unloading costs of international transit containers are high, many coastal ports have set lower prices due to fierce competition. For local containers, due to the relatively small competitive constraints faced by ports, their charging level is significantly higher than that of international transit containers, with a gap of 2-3 times in the middle. This practice of relying on market dominance to raise prices is suspected to constitute an unfair high price behavior prohibited by the Anti Monopoly Law.
Thirdly, imposing unreasonable trading conditions such as mandatory services, non competition clauses, and loyalty clauses on trading partners. Many ports use their dominant position in relevant markets to impose unreasonable trading conditions when dealing with shipping companies and cargo owners. For example, some ports set the unpacking and tallying services that should have been independently decided by the cargo owner as a prerequisite for the port to release containers. The shipper needs to pick up the container and must first unpack and tally the goods, and pay the relevant fees, which increases the burden on the shipper. Some ports require shipping companies to use them as transit ports for surrounding ports in contracts signed with them, and ensure that sea freight rates are not higher than the corresponding sea freight rates for the surrounding ports' routes. These terms are not related to the transactions between the port and shipping company themselves, are unequal and inappropriate, and are suspected of constituting additional unreasonable transaction conditions.