Maersk Receives Subpoena in DOJ Antitrust Investigation of Carriers

Two weeks after the White House singled out the container shipping industry announcing the administration’s intent to investigate antitrust, competition, and price collusion in the industry, the first news of an investigation surfaced. This follows similar actions by two Congressional subcommittees which also issued requests for information from three of the largest shipping companies.

As first reported by the Journal of Commerce, Maersk has received a subpoena from the U.S. Department of Justice. Details of the investigation have not been announced but it is believed to relate to Biden’s direction to the Department of Justice and the Federal Maritime Commission to ensure compliance with existing antitrust regulations. 

At issue for the administration is the domination of container shipping by the three big alliances which they highlighted as having rapidly expanded to control 80 percent of global volumes.

Shippers, retailers, manufacturers, and agricultural interests have all been complaining and calling for investigations over the sudden increases in fees and what they have called abusive businesses practices that emerged during the pandemic. In addition to the increase in D&D fees shippers have been experiencing as port congestion worsened, the Biden administration cites the problems of exporters to ship their goods as containerships have skipped ports and rushed back to Asia loaded with empties.

Maersk said it believes the information covered by the subpoena was part of an ongoing investigation by the DOJ into the supply chain disruptions working in cooperation with the Federal Maritime Commission. It is unknown if other carriers were also subpoenaed or how the information DOJ is requesting differs from the requests from the Congressional subcommittees. 

Maersk, CMA CGM, and Hapag-Lloyd each received requests from Congress for documents and information from each company explaining their decision to increase shipping rates well beyond their costs. The companies were given a deadline of the end of this week to reply.

It is not the first time that DOJ has launched an investigation into the rates and business practices of the large carriers. Almost five years ago to the day, DOJ subpoenaed companies including Maersk, Hapag-Lloyd, Evergreen, OOCL, and others in a wide-reaching investigation. 

All told 20 companies reportedly were involved in the investigation that lasted two years. At the end of February 2019, Maersk and Hapag confirmed that they have been notified that DOJ closed the investigation without any charges of wrongdoing or antitrust violations.

The current investigations come as Congress is also working on the first major reform of the Ocean Shipping Act in years seeking to expand the oversight capabilities of the FMC and reporting requirements of the major carriers. 

The draft legislation cleared the U.S. House in late 2021 and is currently being debated in the Senate. President Biden called on Congress to act on the legislation saying he supported the efforts as part of the focus on stopping antitrust behavior.

The shipping industry and many related parties including the ports and even labor unions are aligning to stop the legislative actions. 

They contend that the alliances are designed only to enhance service and are playing a critical part in maintaining the industry during the current surge in volumes. They argue that the alliances balance capacity and make it possible to offer service to a wider range of ports and if they were impeded by the legislation it would be detrimental to the recovery of the supply chain.