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4 THE JOURNAL OF COMMERCE Editor's Letter Mark Szakonyi ANTITRUST INVESTIGATORS' raid of the biannual Box Club meeting in San Francisco — pre-empting the agency tasked with regulating container shipping — indicates the Department of Justice is targeting a "gray area" between its authority and that of the Federal Maritime Commission, The March 15 action was the first time in decades that maritime attorneys could recall the DOJ serv- ing subpoenas on the container lines, much less the CEOs. The meet- ing of the International Council of Containership Operators, the Box Club's official name, is a private gath- ering of the heads of the major carriers. The DOJ has a history of antipathy toward the FMC's handling of the limited antitrust immunity carriers enjoy under the Shipping Act. Anti- trust investigators believe that decades of being able to legally discuss pricing under antitrust immunity has left the industry without a disciplined culture to follow antitrust laws. But the decision to serve sub- poenas, especially on the CEOs, is an escalation of the DOJ's approach. The most recent direct action affecting major carriers came when the department issued a civil investigation demand to members of the Trans- pacific Stabilization Agreement. The group represents 15 of the largest carriers in the trans-Pacific trade. Before the DOJ's action, the FMC had begun a fact-finding investiga- tion, which started in 2002, and was extended through 2003, after allega- tions that member carriers violated the Shipping Act during the prior service contract season. The results of the investigation were never disclosed The DOJ has regularly raised con- cerns about the FMC's approval of major vessel-sharing agreements. Those concerns have been renewed by the recent slew of mergers and acquisitions that has increased con- centration within the industry. The FMC has yet to reject a VSA, with the three newest ones — THE, Ocean, and 2M alliances — taking effect April 1. Antitrust investigators also have raised concerns about member car- riers' ability to exchange sensitive information, saying it allows them to coordinate domestic third-party services such as stevedores and tug services. In a statement on the Ocean Alliance, the DOJ on Nov. 22 said: "The agreement appears to contemplate collaboration that extends beyond the scope of the Shipping Act." Container lines have proposed language in alliance agreements that would allow carriers to contract jointly with third parties, only to drop those proposals after FMC members objected. While it hasn't prosecuted major container lines for years, the DOJ has launched prosecution cases against roll-on, roll-off carriers and Jones Act carriers. The investigation of a ro-ro price-fixing conspiracy centered in Baltimore produced guilty pleas and multimillion-dollar fines by Wallenius Wilhelmsen Logistics, "K" Line Japan, NYK Line Japan, and CSAV. Eight carrier executives have pleaded guilty in the last few years. Years earlier the DOJ prosecuted carriers operating in the domestic trade of US mainland-Puerto Rico trade. Horizon Lines, Sea Star Line, and Crowley Maritime pleaded guilty to price-fixing charges and paid mul- timillion-dollar criminal and civil penalties, and six former Horizon and Sea Star officials were sentenced to prison for their parts in the scandal. The extent of DOJ's investigation isn't clear, and there's no guarantee it will become clear anytime soon. The FMC and DOJ declined to comment. Although it's unusual for carrier CEOs to be subpoenaed, carriers have long been in the sights of antitrust regulators in the US and the European Union. In a settlement with EU carriers last year, 15 car- riers ag reed to quit publishing a nd communicat-ing details of planned general rate increases after trustbusters raised concern that the announcements could signal pricing behavior among carriers. The agreement and a public explanation of antitrust officials' concern came two years after carriers' offices were raided by EU authorities. JOC 'Gray' Area of Authority The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, April 3, 2017, Volume 18, Issue No. 7. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. APRIL 3.2017 EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 609 649 2181 MANAGING EDITOR Barbara Wyker 908 777 3217 EXECUTIVE EDITOR, JOC.COM Mark Szakonyi 202 872 1234 SENIOR EDITORS Joseph Bonney, Breakbulk/Project Cargo, Gulf Coast 973 508 2417 William B. Cassidy, Trucking and Domestic Transportation 202 872 1228 Bill Mongelluzzo, West Coast 562 428 5999 Hugh Morley, Northeast, Mexico 646 679 3475 Greg Knowler, Asia Editor, IHS Maritime & Trade +852 3975 2647 Turloch Mooney, Global Ports, IHS Maritime & Trade +852 9011 9109 ASSOCIATE EDITOR Reynolds Hutchins, Intermodal, Government/Regulation, Southeast Ports 202 572 1487 ASSISTANT WEB EDITOR Dustin Braden 646 679 3450 SENIOR ECONOMIST, IHS MARITIME & TRADE Mario O. Moreno 973 204 7796 SENIOR CONTENT EDITOR Alessandra Gregory Barrett 860 248 5238 SENIOR DESIGNER Sue Abt, 415 312 2691 DESIGNER Bryan Boyd, 908 910 7849 PUBLISHER Tony Stein 770 295 8809, SALES Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954 551 8305 Zachary Gorman, Account Executive Northeast sales, Classifieds/Reprints/Copyrights 646 679 3466 Misty Belser, Senior Sales Executive 919 869 7404 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 973 776 8660 • 800 952 3839 MANAGING DIRECTOR, MEDIA AND EVENTS, IHS MARITIME & TRADE, Rhiannon James SENIOR DIRECTOR, CONTENT, IHS MARITIME & TRADE, Peter Tirschwell DIRECTOR, JOC AND RAILRESOURCE, IHS MARITIME & TRADE, Amy Middlebrook MANAGER, PRODUCTION, Carmen Verenna MARKETING PROGRAMS MANAGER, PIERS AND JOC, Jesse Case ©2017 The Journal of Commerce — All Rights Reserved For more information, visit our website,

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