Justice Won't Challenge Truck Network

Sept. 14, 2009
The US Dept. of Justice will nto challenge the proposal of seven regional trucking companies to engage in “collaborative activity.”

The Dept. of Justice (DOJ) announced it will not challenge a proposal by seven regional less-than-truckload (LTL) freight transportation companies to bid jointly and engage in other collaborative activity as part of their nationwide LTL truck transportation services joint venture. DOJ said, “Based on representations made by the applicants, the proposed conduct is not likely to reduce competition in regional LTL truck transportation markets and could enhance competition in the long haul LTL market.”

The regional LTL carriers that comprise the Reliance Network joint venture are: Averitt Express Inc.; DATS Trucking Inc.; Lakeville Motor Express Inc.; Land Air Express of New England; Pitt Ohio Express; Canadian Freightways; and Epic Express.

According to DOJ, the carriers represented that each serves a distinct geographic region in North America with insignificant overlap among their respective operations. They further represented that each carrier faces significant competition in the regions in which they operate and that, collectively, the carriers would account for less than 20% of the LTL freight transportation business in these regional markets, and far less than 20% of a nationwide LTL freight transportation market.

The Reliance Network carriers requested a business review letter from the Antitrust Division expressing its enforcement intentions with respect to a proposal to engage in collaborative activity, including collective rate-making for multi-regional shipments and territorial restrictions. The carriers represent that the proposal would allow them to offer "seamless" nationwide LTL freight transportation services and respond to shipping opportunities that originate from multiple regions by sharing key information and internal systems. To achieve these efficiencies, the carriers represent that they will combine information technology, operations, sales and marketing efforts, and administration. Each member carrier will continue to operate its regional LTL business independently and will retain the right to withdraw unilaterally from the joint venture.

Under the Department's business review procedure, DOJ explained, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division currently intends to challenge the action under the antitrust laws.

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