Cartel agreements made it possible for freight companies to charge customers more for retail freight forwarding services, said the NZ Commerce Commission. In June, two international freight companies – including Sydney-based Mondiale Freight Services – were fined a total of more than $9 million over 'deceptive' Australia/NZ freight cartels.
Mondiale Freight Services Limited, Sydney
“The Commerce Commission has issued warnings to eight international freight forwarding companies that in the Commission’s view likely entered into cartel agreements with Mondiale Freight Services Limited (Mondiale) or Oceanbridge Shipping Limited (Oceanbridge) – in some cases with both – to not compete for customers."
The companies who received warnings are:
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,
Stellar International Limited.
"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," said the NZCC.
“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 $4.9m on Mondiale and $4.6m on Oceanbridge. Four individuals associated with Mondiale and Oceanbridge also received penalties ranging from $65,000 to $100,000. The combined penalties imposed were $9.7m.
“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, 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.
“We will continue to focus on identifying potential cartel conduct in global supply chains.”
The alleged arrangements in the case relate to agreements reached prior to the COVID-19 pandemic. The arrangements took place before and after the Commerce Act was amended in 2017. All conduct ceased before 8 April 2021.
“As of 8 April 2021, cartel conduct is now punishable with a term of imprisonment of up to 7 years, underlying just how serious and harmful offending of this nature can be," the commission added.
