Crowley Liner Services Offers Statement in Collusion Scandal

crowley containership
Image by Len Kaufman, via Facebook

An agreement was filed yesterday in U.S. District Court in San Juan, Puerto Rico, in which Crowley Liner Services, Inc. (CLSI) agreed to plead guilty to violating the Sherman Antitrust Act in the Puerto Rico liner trade.  The charges allege that Crowley Liner Services, along with Sea Star Lines and Horizon Lines, conspired to fix the base rates of certain seaborne freight between the continental United States and Puerto Rico.

The Justice Department said that Crowley Liner Services and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates. The agreement filed today resolves CLSI’s involvement in the government investigation which first came to light in April 2008.

In the original sentencing, a fine of $14.2 million, $17 million, and $45 million were levied on Sea Star Lines, CLSI, and Horizon Lines respectively, however due to the near bankruptcy situation faced by Horizon Lines, their total fine was reduced to $15 million.

CLSI notes that it has never before pled or been found guilty of criminal activity, and stressed the importance of putting this matter behind it after an investigation spanning more than four years.

While these points are relevant, the company offered no excuses.  “We regret having any involvement whatsoever in this activity,” said Michael Roberts, SVP and General Counsel of Crowley Maritime Corp, parent company of CLSI.  “Such conduct is contrary to our explicit policies, and violates our core values.  It is absolutely unacceptable.”

The company has enhanced its antitrust compliance program, intensifying training and applying it to a broad base of employees. This program follows best practices that include computer-based learning, small group and person-to-person counseling, and extensive auditing.

“We are confident that the actions taken will prevent such activities in the future,” said Roberts.  “It is also important to move beyond this matter, and focus on growing the business and providing great service to our loyal customers.”  Crowley noted that it has also resolved nearly all potential civil claims related to this matter.