Expeditors International has been slapped with a 4 million Euro fine for alleged price fixing back in 2006 in the Hong Kong - Europe trade lanes.
Back in the day NVOCCs were expected to fix prices, at least in the USA, and to quickly report them to the FMC to avoid prosecution for doing so. But with deregulation all that went away, and now there is supposed to be no price fixing.
Here again we have an example of governments charging 4th parties (we taxpayers) to solve a problem they as 3rd parties (regulators and law enforcement) perceive when observing first and second parties (buyers and sellers). In this instance it is freight services that is being regulated.
The entire thing can be left up to the 1st and 2nd parties. If we had a free market in freight, and big freight companies conspired to fix rates high, then that would be an opportunity for some enterprising people to charter excess shipping capacity and launch a start up at fair prices.
The reason this does not often happen in a free market is only because cartel members always cheat on the cartel. OPEC is notorious for underreporting the oil it puts on the market. Marc Rich became a billionaire arbitraging goofy oil extraction rules.
And back in the bad old days of government-approved price fixing in shipping, when it was legal to do so, the legally fixed-price cartels cheated on themselves. The creativity unleashed by the steamship lines in order to make side deals with each importer was amazing. It would take me an hour to explain how shippers used an obscure rule to save we small businesses outbound domestic freight charges to subsidize the nominally high ocean freight.
Instead of fining Expeditors 4 million euros, the europeans ought to save themselves hundreds of millions by eliminating the regulators and let we business people fend for ourselves.
Feel free to forward this by email to three of your friends.
Back in the day NVOCCs were expected to fix prices, at least in the USA, and to quickly report them to the FMC to avoid prosecution for doing so. But with deregulation all that went away, and now there is supposed to be no price fixing.
Here again we have an example of governments charging 4th parties (we taxpayers) to solve a problem they as 3rd parties (regulators and law enforcement) perceive when observing first and second parties (buyers and sellers). In this instance it is freight services that is being regulated.
The entire thing can be left up to the 1st and 2nd parties. If we had a free market in freight, and big freight companies conspired to fix rates high, then that would be an opportunity for some enterprising people to charter excess shipping capacity and launch a start up at fair prices.
The reason this does not often happen in a free market is only because cartel members always cheat on the cartel. OPEC is notorious for underreporting the oil it puts on the market. Marc Rich became a billionaire arbitraging goofy oil extraction rules.
And back in the bad old days of government-approved price fixing in shipping, when it was legal to do so, the legally fixed-price cartels cheated on themselves. The creativity unleashed by the steamship lines in order to make side deals with each importer was amazing. It would take me an hour to explain how shippers used an obscure rule to save we small businesses outbound domestic freight charges to subsidize the nominally high ocean freight.
Instead of fining Expeditors 4 million euros, the europeans ought to save themselves hundreds of millions by eliminating the regulators and let we business people fend for ourselves.
Feel free to forward this by email to three of your friends.
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