STB DENIES CARRIERSÆ PETITION TO DISMISS DHXÆS RATE COMPLAINT
The U.S. Surface Transportation Board has denied a motion filed by Sea-Land Service and Matson Navigation Co. to dismiss a complaint filed by freight forwarder DHX concerning the reasonableness of carriers’ rates and practices in the Hawaiian trade.
Congress centralized jurisdiction of the all-water domestic trades, the so-called Jones Act trades, under the STB when it enacted the 1995 ICC Termination Act. The Act created a “zone of reasonableness” concept, which provided that annual rate increases of 7.5 percent or less by water carriers could not be found to be unreasonable.
DHX asked the STB to find that the carriers had acted unlawfully by imposing rate increases on certain shipping containers that amounted to more than 7.5 percent per year.
Sea-Land and Matson asked the agency to dismiss the complaint on the grounds that their rate increases were within the zone of reasonableness, and that DHX’s complaint improperly assumed the annual rate increases of more than 7.5 percent were unlawful.
The STB found the carriers’ motions identified certain shortcomings in how DHX was trying to identify the rates at issue. The STB said DHX could not succeed with its complaint simply by showing that rate increase may have exceeded the zone of reasonableness.
However, the STB concluded that “DHX had framed its case as principally a rate case” and “that Matson and SL have engaged in unreasonable practices in an effort to put consolidators such as DHX out of business.”
“Although parties may not use the unreasonable practice provisions of the statute to bolster a weak rate case,” the agency said. “We cannot at this point say that DHX could not possibly prevail in an unreasonable practice complaint.”