Shipping Line Executives Charged with Cartel Conspiracy Offences

US – Wallenius Wilhelmsen Logistics (WWL) and three of its Executives have been charged with participating in a long-running ocean freight conspiracy to allocate certain customers and routes, rig bids, and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the US. The case, the latest in a swathe of cartel and antitrust actions* which have blighted the industry of late, has now seen eleven Executives and four international shipping lines charged for their role in the ocean shipping investigation with collective criminal fines totalling over $230 million.

A federal grand jury returned the indictment in November 2016 but it was only unsealed in the US District Court in Baltimore this week. It found Anders Boman, Arild Iversen, both former Executives of WWL, and Kai Kraass, a current WWL Executive, guilty of conspiring to constrain trade in RoRo cargo worldwide.

As stated eleven Executives have been charged in the investigation to date. Four have pleaded guilty and been sentenced to serve prison terms. Others remain international fugitives. WWL has pleaded guilty and been sentenced to pay a $98.9 million fine. Three other companies have also pleaded guilty, resulting in total collective criminal fines over $230 million. Chilean firm CSAV was ordered to pay an $8.9 million fine, and Japanese shippers K Line a $67.7 million penalty, and NYK a $59.4 million fine.

WWL has taken the largest hit with its enormous fine calculated on its prolonged illicit activities having allegedly participated in the antitrust conspiracy from at least as early as February 2000 and continuing until at least September 2012.

The indictment alleges that Boman, a citizen of Sweden, and Iversen, a Norwegian citizen plus Kraass, a German citizen, conspired with their competitors to allocate certain customers and routes for the shipment of cars and trucks, as well as construction and agricultural equipment. The defendants accomplished their scheme by, among other things, attending meetings in Baltimore County and elsewhere during which they agreed not to compete against each other.

The conspirators agreed that whilst refraining from bidding or by agreeing on the prices they would bid for certain targeted customers and routes. In addition, Boman, Iversen, and Kraass agreed with their competitors to fix, stabilise, and maintain rates charged to customers of international ocean shipping services.

* to see just how many occasions the sector has come under investigation simply type a suitable keyword, such as cartel, into the News Search box at the head of this page.