Collective Freight Rate Fixation by Truck Unions Breached Competition Act: CCI

Indian Steel Association Vs Bhadrasahi/ Guali Truck Association (Competition Commission of India)

The Information was filed by the Indian Steel Association (ISA) under Section 19(1)(a) of the Competition Act, 2002 against Bhadrasahi/Guali Truck Association (OP-1), Bonai Truck and Tipper Owners Association (OP-2), Keonjhar District Truck Owners’ Association (OP-3), and later, Joda Truck Owners Association (OP-4). ISA alleged that these truck associations operating in Odisha’s mining regions were violating Section 3 of the Act by fixing freight rates, excluding independent transporters, and restricting the use of larger trucks.

ISA submitted that steel manufacturers procure iron ore and other raw materials from Odisha mines, where transportation largely depends on road transport. According to ISA, the OPs issued their own freight rate charts prescribing rates higher than those prevailing in the market and above the maximum rates fixed by the State Transport Authority (STA). ISA alleged that truck owners were compelled to register with these associations to operate in the region and that only registered vehicles were allowed to transport minerals. It was further alleged that the associations preferred smaller trucks, resulting in higher logistics costs.

The Commission had earlier formed a prima facie opinion that the conduct of the OPs warranted investigation and directed the Director General (DG) to investigate the matter.