Justice Department probes Puerto Rico carriers pricing
Pricing practices of at least some ocean carriers in the U.S. mainland to Puerto Rico trade are being investigated, and it is unclear whether the probe may include other domestic trade lanes.
All four major container carriers between the U.S. mainland and Puerto Rico — Horizon Lines, Crowley Maritime, Sea Star Line and Trailer Bridge — have received requests for information, and federal agents visited the offices of several on Thursday, seizing files.
But the story has taken a unusual twist because Alexander & Baldwin Inc. has issued a statement saying that its Matson Navigation subsidiary, which operates vessels between the U.S. West Coast and Hawaii, “has been informed by the Department of Justice that it will receive a subpoena for documents related to domestic ocean carriage.”
Matson does not participate in the Puerto Rico trade, and it was not immediately clear if investigators were trying to get information about practices in other trades lanes for comparison purposes or to probe more widely.
Horizon Lines, which operates services to Hawaii, Guam, and Alaska as well as Puerto Rico, said federal agents served search warrants and a grand jury subpoena relating to an investigation of pricing practices of ocean carriers operating in the Puerto Rico trade.
The Puerto Rico newspaper San Juan Star said federal agents entered Horizon's and Sea Star Line's offices in the suburbs of San Juan, The paper published photos of FBI agents removing files from Sea Star.
Sea Star Line is owned by SaltChuk Resources Inc., parent of the U.S. mainland-Alaska carrier Totem Ocean Trailer Express Inc and Puerto Rico investors.
Horizon said it was cooperating fully with the government officials, but said it has not been informed of the specific subject matter of the inquiry, which it said was being conducted by the U.S. Justice Department’s antitrust division.
No information was immediately available from the Justice Department, the FBI office in San Juan or Sea Star. A spokesman from FBI headquarters said it was the agency’s position not to comment on ongoing investigations.
Crowley Maritime Corp. issued a statement saying “federal law enforcement officials are conducting an investigation concerning antitrust issues in the Puerto Rico shipping trade lane.
“Certain records were obtained by investigators Thursday. Crowley intends to cooperate with investigators and is confident that it has acted appropriately in all respects. Neither Crowley, nor its employees, have been identified as targets of this investigation,” it added.
William Gotimer Jr., general counsel of Trailer Bridge, said his company had received a subpoena requesting information, but no agents had visited the company’s offices.
The Trailer Bridge 10K annual report for 2007 said that, according to PIERS, the respective market shares of the Puerto Rico carriers are Horizon, 34 percent; Crowley, 31 percent; Sea Star, 21 percent; and Trailer Bridge, 14 percent. ' Chris Dupin, Keith Higginbotham