Six global freight forwarders have pleaded guilty and have accepted fines of USD$50.27 million (NZD$70.17 million) from the US Department of Justice (DOJ) for conspiring to fix air cargo fees between 2002 and 2007, according to the Shipping Gazette.
Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of US$100 million per offence for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine, according to the report, citing a DOJ release.
These are the first charges filed as a result of an antitrust investigation into the freight forwarding industry.
The six companies were charged separately in US District Court for the District of Columbia are: Houston-based EGL Inc; Swiss-based Kuehne + Nagel International; Bermuda-based Geologistics International Management (Bermuda); Swiss-based Panalpina World Transport (Holding); Germany’s Schenker AG; and Ohio’s BAX Global.
All were engaged in one or more separate conspiracies to impose certain charges or fees on customers purchasing international freight forwarding services for cargo freight destined for air shipment to the United States, said the DOJ.
Under the plea agreements, the six companies will pay the following fines ranging from US$687,960 to $19.74 million.
“The department’s investigation uncovered six different conspiracies harming businesses and consumers in the United States and across the globe,” said Christine Varney, assistant attorney general in charge of DOJ’s antitrust division.
The six alleged conspiracies being charged are:
- A conspiracy that took place from August 2005 to December 2007, to impose a peak season surcharge (PSS) on shipments from Hong Kong to the US, in which K+N, Panalpina, Schenker, BAX and others participated.
- A global conspiracy that took place from March 2003 to October 2007, to impose an air automated manifest system (AAMS) fee on international air shipments of cargo to the United States, in which EGL, Geologistics and Panalpina and others participated.
- A conspiracy that took place from July 2004 to October 2007, to impose an AAMS fee on shipments from Germany to the US, in which K+N, Schenker and others participated.
- A conspiracy that took place from March 2004 to October 2007, to impose an AAMS fee on shipments from Switzerland to the US, in which K+N and others participated.
- A conspiracy that took place from October 2002 to October 2007, to impose a new export system (NES) fee on international air shipments from the UK to the US, in which EGL, K+N, BAX and others participated.
- A conspiracy that took place from July 2005 to June 2006, to impose a currency adjustment factor (CAF) on international air shipments from China to the US, in which K+N, Panalpina, Schenker, BAX and others participated. – Source: Shipping Gazette