EU Investiages Shipping Companies

From Bloomberg News

European Union regulators opened an antitrust investigation into container liner shipping companies, saying they signaled pricing changes to each other with press and website statements.
“Since 2009, these companies have been making regular public announcements of price increase intentions through press releases on their websites and in the specialized trade press,” the EU said in an e-mailed statement today. “These announcements are made several times a year and contain the amount of increase and the date of implementation, which is generally similar for all announcing companies.”
The pricing announcements may allow the companies to signal future pricing plans to each other and could allow them to raise prices on transport services to and from Europe, regulators said.
The European Commission didn’t identify the companies in the probe in today’s statement.
AP Moller-Maersk A/S, owner of the world’s largest container shipping company, CMA CGM SA and Hapag-Lloyd were among companies raided by EU officials in 2011 over possible collusion. EU regulators are also gathering market information over a pact between Maersk, CMA CGM and Mediterranean Shipping Co. to create the largest container alliance.

Shipping companies have not yet understood how they should operate without the price collusion they were accustom to in the old days of conferences.  It's a new world,  but they just don't get it.

Kuehne and Nagel, Panalpina, accused of price fixing

Although it's been years (actually decades) since price fixing was legal in airfrieght, some companies can't seem to stop the practice.

From Bloomberg News

New Zealand Indicts Kuehne in Antitrust Suit Against, BaZ Says

New Zealand authorities indicted Switzerland’s Kuehne & Nagel International AG and Panalpina Welttransport Holding AG as well as other logistics companies in an antitrust case, Basler Zeitung reported.

The companies allegedly “artificially” increased air- freight prices from and to New Zealand since 2001, the newspaper said, citing New Zealand’s authorities.

Kuehne & Nagel rejects the charges and will defend itself in court while Panalpina is in settlement talks with New Zealand’s authorities, Basler Zeitung cited the companies as saying.

Fall out from illegal price fixing U.S./Puerto Rico

In general, I have a problem with this whole idea that only U.S. Flag carriers can offer service between the mainland and Puerto Rico. That also applies to Hawaii and Alaska.

To add insult to injury, the carriers operating between the mainland and Puerto Rico got together to illegally fix their rates. Some people went to jail for this action.

This is the outcome for Horizon Lines, one of the carriers.

Horizon Lines was facing multiple class action lawsuits from customers who claimed financial damage because of the company’s allegedly unlawful conduct, after the US Department of Justice antitrust division’s investigation into price fixing between Horizon Lines and its trade rivals became known.

HORIZON Lines has agreed to pay $20m and freeze freight rates in its Puerto Rico trade lane for two years to settle a class action lawsuit brought by disgruntled customers.

Customers with Puerto Rico contracts with the Jones Act container line would have the option, in lieu of receiving cash, of a freeze on their base rates for two years beyond the expiration the contracts.

If I were a customer of Horizon, I would do 2 things.

1) Take the money, not the freeze on rates

2) Start looking for services from Europe and South America to Puerto Rico. Start shopping the rates from those origins, and use these to negotiate new rates with your carrier.

Who knows, maybe in the end it will be cheaper to source products from someplace other than the mainland U.S.

Anti-Trust Violations in Puerto Rico Trade, Jail Time for Execs

Apparently there will be jail time for shipping executives who have violated the anti-trust laws.

As far as I know, this is a first in the U.S. shipping industry.

Here is the press release from the Department of Justice. click here

Back in the day there were closed conferences, then there were open conferences, then there was the right to independent action, and eventually the whole anti-trust protection is going away.

Honestly,I was shocked there will be jail time. Not sure how much time, but guess there will be some.

I knew a couple of these guys who will be going to jail. I use to collude with them in conference meetings back when it was legal. I really feel bad for them and their families.

I guess it's hard for people to adjust when they change the rules of the game.