DOJ clears Reliance Network for LTL collaboration

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Updated Jan 6, 2010

The U.S. Department of Justice announced Sept. 8 that it will not challenge a proposal by seven regional less-than-truckload freight transportation companies to bid jointly and engage in other collaborative activity as part of their nationwide LTL truck transportation services joint venture. The proposed conduct is not likely to reduce competition in regional LTL truck transportation markets and could enhance competition in the long-haul LTL market, DOJ said.

The regional LTL carriers that comprise the Reliance Network joint venture are Averitt Express Inc., DATS Trucking Inc., Lakeville Motor Express Inc., Land Air Express of New England, Pitt Ohio Express, Canadian Freightways and Epic Express.

The carriers say that each serves a distinct geographic region in North America with insignificant overlap among their respective operations, DOJ said. They also argued that each faces significant competition in the regions in which they operate and that, collectively, the carriers would account for less than 20 percent of the LTL freight transportation business in these regional markets, and far less than 20 percent of a nationwide LTL freight transportation market.

The Reliance Network carriers requested a business review letter from the Antitrust Division expressing its enforcement intentions with respect to a proposal to engage in collaborative activity, including collective rate-making for multiregional shipments and territorial restrictions. The carriers told DOJ that they would be able to offer seamless nationwide LTL freight transportation services and respond to shipping opportunities that originate from multiple regions by sharing key information and internal systems. The carriers plan to combine information technology, operations, sales and marketing efforts, and administration.

Each member carrier will continue to operate its regional LTL business independently and will retain the right to withdraw unilaterally from the joint venture, DOJ said.
Earlier this year, CCJ recognized Lakeville Motor Express as Innovator of the Year for its leadership in establishing the Reliance Network. Another member of the alliance, Pitt Ohio Express, was CCJ’s Innovator of the Year in 2007 and was recognized for its efforts in data mining and developing managerial talent, among other initiatives.