Shipping & Logistics

Watchdog turns focus on shipping, trucking with eye on price fixing

Wang’ombe Kariuki, Competition Authority of Kenya director- general. file PHOTO | NMG
Wang’ombe Kariuki, Competition Authority of Kenya director- general. file PHOTO | NMG 

Kenya’s antitrust watchdog has turned its eye on shipping and trucking as it looks to root out any collusion or price fixing among players in the sector.

The Competition Authority of Kenya (CAK) has called for consultants to apply for a contract to assess competition in the shipping, trucking and haulage sector in the East African region.

Companies hired to do the work will be expected to determine the roles played by industry associations on allocating routes and determining prices. The consultant will also assess whether county regulations “have a negative impact on competition in the trucking industry”.

The study will reach across borders to determine whether transport costs are adversely affecting the cost of goods and Kenya’s exports to the region.

“It is a fact that transport plays a key role in regional integration. If there are uncompetitive practices in this area, the dream of regional integration will be more expensive to realise,” said CAK director-general Wang’ombe Kariuki.

Additionally, the proposed study will probe how anti-competitive behaviour creates non-tariff barriers in the East Africa region and propose how the law can be applied to resolve these cases.

Mr Kariuki said the study will be completed by June or December 2018.

The transport sector has come under the spotlight for anti-competitive behaviour.

In 2015, the World Bank highlighted cartel-like behaviour in the industry as being one of the reasons for high costs.

The costs in turn had a ripple effect on prices paid by consumers in the region.

The authority has previously carried out similar studies on a range of industries including agriculture (fertiliser), pay television and banking.

Findings determine the level of competition in a specific market segment and guide the CAK on the appropriate action needed to ensure fair competition.