Hawaiian Shippers Fix Prices, Class Claims

SAN FRANCISCO (CN) - Matson Navigation Co., Matson Terminals, Alexander & Baldwin, and Horizon Lines conspired to fix the price of shipping services between the mainland United States and Hawaii, TJ Gomes Trucking claims in an antitrust class action in San Francisco Federal Court.

The plaintiffs claim Matson and Horizon - which control 65 and 35 percent of the Hawaii shipping market, respectively - control prices through a "capacity sharing agreement," among other tactics. The agreement allows each to transport cargo on the other's ships at favorable rates.

"The capacity sharing arrangement was the functional equivalent to two duopolists acting like a monopoly," the lawsuit claims.

The plaintiffs also challenge the "parallel, identical, and near simultaneous imposition of fuel surcharges." Matson and Horizon justify these fees as necessary to offset rising fuel costs.

In a truly competitive market, plaintiffs say the more fuel-efficient operator would find ways to lure business from the less fuel-efficient shipper.

But the defendants chose not to compete on price, the suit claims, "and a plausible explanation for that lack of competition in this duopoly is that Defendants were conspiring."

The cost of shipping goods from Hawaii has risen by nearly 40 percent since 2005, a spike attributed in part to the defendants' alleged cartel.

Matson and Horizon allegedly control 100 percent of the containerized market, and about 96 percent of the total market for Hawaiian shipping. The only other players are small, specialized barge and auto-carrier lines.

Plaintiffs are represented by Girard Gibbs.

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