First Carrier Abandons Controversial GRIs
Amidst controversy about the GRIs Hapag-Lloyd is the first carrier to abandon GRIs for FAK container rates.
Hapag-Lloyd has set minimum freight all kinds (FAK) rates for containers on its vessels from Asia to North Europe and the Mediterranean.
Due to an investigation of the European Commission General Rate Increases (GRIs) have become controversial. A GRI is an adjustment of freight prices per transported container unit for a specific trade route and period. As GRI announcements are normally made between 3 and 5 weeks before their intended implementation date, many carriers can make similar price increases. Therefore, the European Commission is concerned that this violates EU antitrust rules, as it might harm competition by raising prices for their services. GRIs would also provide the opportunity for carriers to coordinate their prices. Under new guidance rules carriers now have to specify the maximum final price. They are still allowed to quote lower rates, but they cannot quote above the maximum price.
Hapag-Lloyd has, however, stated that the reason for the abandoning of the GRIs was not related to the EU investigation, but resulted instead from the volatility of the rate system. This volatility was evident in the recent fall of freight rates on Asia-Europe trade.