Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Justice Department will not challenge proposed chassis use agreement, (Sep 23, 2014)

By Linda O’Brien, J.D., LL.M.

The Department of Justice Antitrust Division announced today that it will not challenge a proposal by Flexi-Van Leasing Inc. and Direct ChassisLink Inc. to enter into a Chassis Use Agreement at the ports of Los Angeles and Long Beach, California. Flexi-Van and Direct ChassisLink are chassis leasing companies that also manage chassis pools operating at the ports of Los Angeles and Long Beach.

Based upon representations made by the applicants, as well as the department’s investigation, the department has no present intention to challenge the proposed agreement.

The department’s position was stated in a business review letter to counsel for Flexi-Van and Direct ChassisLink from Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.

According to representations made by Flexi-Van and Direct ChassisLink, the proposed agreement will result in the establishment of a “gray” chassis pool, which will extend benefits associated with individual pools by allowing the interchange of chassis across multiple pools throughout the port complex. The increased flexibility created by the interchangeability will enhance customer service, improve chassis productivity, and respond to the desire of the Long Beach and Los Angeles ports authorities to achieve better overall utilization of the region’s chassis fleets. The pools managed by Flexi-Van and Direct ChassisLink will continue to compete for business, and leasing terms and rates will continue to be set independently by each chassis provider.

Under the proposal, no information will be exchanged between Flexi-Van and Direct ChassisLink regarding customer pricing or other competitively-sensitive terms. A third party provider will be used to facilitate operation of the gray chassis pool, audit chassis usage, and prevent the exchange of competitively sensitive information among the pools and chassis providers. After initial implementation, Flexi-Van and Direct ChassisLink intend that the agreement will become open to other pools at the ports of Los Angeles and Long Beach.

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 currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.

Companies: Flexi-Van Leasing Inc.; Direct ChassisLink Inc.

News: Antitrust AntitrustDivisionNews