Commission warns freight companies over cartel action

In News2 MinutesBy NZ Trucking magazineNovember 4, 2022

The Commerce Commission has issued warnings to eight New Zealand international freight forwarding companies that it says likely entered into cartel agreements.

It says the agreements were with Mondiale Freight Servicesor Oceanbridge Shipping Limited – in some cases with both – to not compete for customers.

The warnings conclude the Commission’s investigation, which began in 2018, into allegations of anti-competitive conduct in New Zealand’s international freight forwarding industry. International freight forwarding relates to all aspects of the logistical arrangements for the movement of cargo in and out of the country.

The companies who received warnings are 360 Logistics Group, Aqua Air Freight Services, C. H. Robinson Worldwide (NZ), Go Logistics, Kerry Logistics (Oceania), Mainstream Global, Ryders Customs and Forwarding, and Stellar International.

Mondiale and Oceanbridge were both suppliers to and competitors of the warned companies.

Earlier in the year the Commission agreed settlements to resolve related proceedings with each of Mondiale and Oceanbridge. The High Court imposed penalties of $4.9 million on Mondiale and $4.6 million on Oceanbridge. Four individuals associated with Mondiale and Oceanbridge also received penalties ranging from $65,000 to $100,000. The combined penalties imposed were $9.7 million.

The Commission said the cartel agreements had the effect of removing competition, making it possible that customers were charged more for retail freight forwarding services than they would have if these companies had actively competed for those customers’ business.

The warnings are not legal findings that a breach of the Commerce Act has occurred, but reflect the Commission’s view of the conduct, it said.

“The warnings make it clear to the businesses that their directors and staff should be aware that entering into these kinds of anti-competitive agreements is likely to be cartel conduct, which may breach the Commerce Act. They also suggest changes in each recipient’s behaviour to comply with the law,” the Commission said.

“The international freight forwarding industry is an important sector of the New Zealand economy,” it said.

“We will continue to focus on identifying potential cartel conduct in global supply chains.”