Shipping Lines Reportedly Subpoenaed by DOJ Antitrust Division
Some major shipping lines, including the Moller-Maersk, Evergreen, Hapag-Lloyd and Orient Overseas Container lines, were called to testify under a Justice Department antitrust investigation, Reuters reported on March 22 (here). The focus of the investigation remains unclear, according to the report. The DOJ Antitrust Division recently voiced some concerns with the shipping industry in comments to the Federal Maritime Commission (see 1611280024). Investigators for the DOJ gave out the subpoenas at a meeting of shipping executives in San Francisco last week, according to the Journal of Commerce (here), which first reported on the subpoenas. Spokesmen for Hapag-Lloyd and Maersk each confirmed that his company received a subpoena and said they would cooperate with the authorities. The DOJ didn't comment, nor did any the other companies mentioned.
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The subpoena was received "in the course of an investigation into the global ocean container shipping industry," the Maersk spokesman said, but "does not set out any specific allegations against Maersk Line." Maersk received the subpoena on March 15, he said. "A subpoena does not mean that a company has engaged in illegal behavior nor does it prejudge the outcome of the investigation itself.”
Investment analysts from Exane BNP Paribas downplayed the likelihood of charges being filed as a result of the investigation, despite the fact that it is dragging down stock prices. "While the headlines appear scary, we suspect the share price reactions will prove overdone, with a strong likelihood that this investigation will not come to very much," the analysts said in a research note. Though there's some history of the DOJ going after price fixing in the industry, "if it has been price-fixing, it hasn’t been doing a very good job," the analysts said. "The reality is that the global container shipping industry has consistently been a huge new subsidiser of not only the US economy, but the global economy as a whole.”