Cartel behaviour warning for eight freight forwarding companies

Eight freight forwarders have been warned about cartel behaviour. Photo / Alex Burton

By RNZ

Eight freight forwarding companies have been issued warnings by the Commerce Commission for likely participating in a cartel - making it possible customers were charged more for retail freight than they needed to.

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

The warnings made it clear to the businesses that their directors and staff should be aware that entering into such kinds of anti-competitive agreements was likely to be cartel conduct, which may breach the Commerce Act.

They also suggested changes in each recipient’s behaviour to comply with the law.

The commission issued the warnings for agreements reached prior to the Covid-19 pandemic.

It viewed that the companies, which control most aspects of cargo moving in and out of the country by air or sea, likely entered into anti-competitive agreements with Mondiale Freight Services Limited (Mondiale) or Oceanbridge Shipping Limited (Oceanbridge) - in some cases with both - to not compete for customers.

The arrangements took place before and after the Commerce Act was amended in 2017. All conduct ceased before 8 April 2021.

The commission considers that 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.

The commission’s investigation into allegations of anti-competitive conduct in New Zealand’s international freight forwarding industry which began in 2018 has now concluded.

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

Last June these two freight forwarders were fined $9.7 million for engaging in cartel conduct Commission. Mondiale was ordered to pay $4.9m, while Oceanbridge was ordered to pay $4.6m.

- RNZ