Mondiale and Oceanbridge fined NZ$9.7M for freight-forwarding cartels

On 17 June 2022 New Zealand's High Court imposed penalties totalling over NZ$9.7 million for cartel conduct: NZ$4.9 million on Auckland-based Mondiale Freight Services, NZ$4.6 million on Oceanbridge Shipping, and NZ$65,000 to NZ$100,000 on each of four individuals associated with the companies. The Commerce Commission had filed proceedings alleging each breached the Commerce Act by agreeing with other freight forwarders not to compete for customers. The two companies ran separate cartels and never cartelised with each other.

The conduct predated COVID-19 and ran for a number of years, engaged in and endorsed by persons at the highest levels of both companies. The High Court acknowledged it grew from a practical tension — both firms sold wholesale freight forwarding to other forwarders while also competing with those same customers for retail work — but found it a serious breach of the Act, one that made it possible customers were charged more than in a competitive market.

Mondiale stopped the practice immediately in 2018 when the issue was first raised, settled with the Commission at the earliest opportunity, and cooperated from the outset. Chief executive Ray Meade apologised publicly. Justice Wylie found Mondiale had not been aware it was breaching the Commerce Act at the time, and had seen the practice as an ethical way to respect the trust and confidence of its wholesale customers.

Over NZ$9.7M in High Court penalties: NZ$4.9M Mondiale, NZ$4.6M Oceanbridge, NZ$65,000–NZ$100,000 on each of four individuals

Both firms answered the conflict between serving wholesale forwarders and competing with them by agreeing not to chase each other's customers — a cartel arrangement under the Commerce Act.

The conduct ran for years with sign-off from the highest levels of both companies, not at the discretion of a single sales team.

Mondiale did not realise that customer-allocation agreements breached the law; the practice had never been tested against the Act.

Customers of both forwarders lost active competition for their business and could have been charged more as a result.

A quiet live-and-let-live understanding with the rivals who are also your wholesale customers is still a cartel; a commercial tension has to be managed within the law, not papered over by agreement.

Mondiale says it strengthened compliance practices across all operations after 2018 and now runs an extensive competition-law training programme. The Commission announced the penalties on 17 June 2022; its chair Anna Rawlings said the arrangements removed competition between counterparties. Air Cargo News first reported the legal proceedings in December 2021.