The Department of Justice will not challenge a proposal by a consortium of seven regional less-than-truckload (LTL) carriers in the United States and Canada to allow any member of the group to bid on contracts and offer rates on behalf of the other carriers for business that originates in multiple regions of the country.
The Justice opinion, which came in the form of a business review letter issued in September, expands the operational scope of the consortium, known as the "Reliance Network," to include collective ratemaking. The DOJ action paves the way for the group to introduce a nationwide LTL tariff by mid-2010, according to Phil Pierce, executive vice president of Averitt Express Inc., one of the network's members.
The group sought the DOJ opinion to ensure that any future collective ratemaking initiatives would not run afoul of federal antitrust laws, Pierce said.
In January 2008, the U.S. Surface Transportation Board approved a proposal by the carriers to pool their operating territories into a network covering the continental United States. Under the arrangement, the network coordinates operations and handles sales and marketing for shipments transiting at least two of the truckers' respective service regions. The network is not involved if a shipment originates and ends within a carrier's service territory. In 2008, the network generated about $100 million in revenue.
In its proposal to DOJ, the carriers said that collectively, they account for less than 20 percent of LTL business in regional markets and much less than 20 percent of the nationwide LTL market. The carriers also said that each faces significant competition in its respective market.
Besides Averitt, the network includes DATS Trucking Inc., Lakeville Motor Express Inc., Land Air Express of New England, Pitt-Ohio Express, Canadian Freightways, and Epic Express.