JUSTICE DEPARTMENT APPROVES TRANSPORTATION SERVICES INC. PROPOSAL TO ACT AS A COMMON BILLING AND COLLECTION AGENT

WASHINGTON, D.C. — The Department of Justice today announced that it would not challenge a proposal by Transportation Services Inc. (TSI) to create a billing and collection company that would act as a common billing and collection agent for ocean carriers that serve the U.S.-Puerto Rico trades.

In a business review letter issued by John M. Nannes, Acting Assistant Attorney General in charge of the Antitrust Division to TSI, the Department said that to the extent the information exchanged is limited to include only payment delinquencies, and the ocean carriers continue to make independent unilateral decisions, the proposal would not likely have an anticompetitive effect.

Ocean carriers that serve the U.S.-Puerto Rico trades transport freight in uniform-size shipping containers that are leased by the carriers to the seller of the cargo. Once the shipment is delivered, the consignees--receivers of the shipment--often use the leased containers for the temporary storage of their cargo. To ensure the return of the equipment within a certain time period, the carriers charge the consignee a fee, often referred to as a "detention and demurrage" charge. Each carrier sets forth an individual policy either by its tariff or by contract that determines when and how the carrier calculates and assesses detention and demurrage charges.

According to TSI, carriers in the U.S.-Puerto Rico trades often experience problems collecting monies owed to them for detention and demurrage charges. In addition, TSI and its prospective customers believe many shippers and consignees who default on their bills seek to obtain services from other ocean carriers without first paying the pre-existing charges.

In an effort to reduce the amount of uncollected debt, TSI proposes to create a company to perform detention and demurrage billing and collection services for the ocean carriers that service the U.S.-Puerto Rico trades. Under its proposal, the joint collection agent will publish the names of customers who have failed to pay their debt as required, including the amount of the delinquency and the number of days the payment is past due. The joint collection agent will make the delinquent list available to its customers, allowing each of them to independently develop and implement its own credit and collection policies with respect to firms listed as delinquent.

TSI and its joint collection agent have agreed to exchange delinquency information with its members without the old or prospective new carrier knowing the identity of the other. TSI and its joint collection agent will refrain from disclosing information among ocean carriers about open accounts, or the general credit terms or practices of carriers. Based on information contained in a customer's file, each ocean carrier customer will be free to make an independent decision to determine whether or not service will be provided to a delinquent customer or whether to insist on protective credit measures.

Under the Department's Business Review Procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division will challenge the action under the antitrust laws.

A file containing the business review request and the Department's response may be examined in the Antitrust Documents Group of the Antitrust Division, Suite 215, Liberty Place, 325 7^th Street, N.W., Department of Justice, Washington, D.C. 20004. After a 30-day period, the documents supporting the business review will added to the file.