Six forwarders to pay $50 million for price fixing

Six forwarders to pay $50 million for price fixing    Six international freight forwarders have agreed to plead guilty and to pay criminal fines totaling $50.27 million for their roles in conspiring to fix fees and charges for international air cargo shipments, the Justice Department announced Thursday.
   According to charges filed separately in U.S. District Court for the District of Columbia, each of the six companies 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 from 2002 to 2007.
   Under the plea agreements, which are subject to court approval, the six companies have agreed to pay the following criminal fines:
   ' BAX Global Inc., Toledo, Ohio (acquired in 2006 and merged into Schenker) $19.75 million.
   ' Panalpina World Transport (Holding) Ltd., based in Basel, Switzerland, $11.95 million.
   ' Kuehne + Nagel International AG, based in Schindellegi, Switzerland, $9.87 million.
   ' EGL Inc. of Houston (which was acquired in 2007 by the UK-based CEVA Group) $4.49 million.
   ' Schenker AG, based in Essen, Germany, $3.54 million.
   ' Geologistics International Management (Bermuda) Ltd., Hamilton, Bermuda, $687,960.
   Each company has also agreed to cooperate with the department's ongoing antitrust investigation.
   “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 the Department of Justice's antitrust division. 'Our investigation continues in this important industry.'
   According to the charges, the companies agreed during meetings and discussions to coordinate various charges and fees on customers purchasing international freight forwarding services for cargo freight destined for air shipment to the United States.
   The six alleged conspiracies being charged Thursday were:
   ' Imposing an Air Automated Manifest System (AAMS) fee on international air shipments of cargo to the United States from March 2003 to October 2007, in which EGL, Geologistics, Panalpina and others participated.
   ' An AAMS fee on shipments from Germany to the United States from July 2004 to October 2007, in which K + N, Schenker and others participated.
   ' An AAMS fee on shipments from Switzerland to the United States from March 2004 to October 2007, in which K+N and others participated.
   ' Imposing a New Export System (NES) fee on international air shipments from the United Kingdom to the United States from October 2002 to October 2007, in which EGL, K + N, BAX and others participated.
   ' Imposing a Currency Adjustment Factor (CAF) on international air shipments from China to the United States from July 2005 to June 2006, in which K + N, Panalpina, Schenker, BAX and others participated.
   ' Imposing a Peak Season Surcharge (PSS) on shipments from Hong Kong to the United States from August 2005 to December 2007, in which K + N, Panalpina, Schenker, BAX and others participated.
   Justice said each company is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million per offense 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.
   Justice said the charges result from a joint investigation into the freight forwarding industry conducted by the Antitrust Division's National Criminal Enforcement Section, the FBI's Washington Field Office and the Department of Commerce's Office of Inspector General.
   Panalpina, which will enter guilty pleas to three counts, said the agreement 'releases the company from further prosecution for any conduct related to the sale of international air freight forwarding services, and for conduct related to the imposition of certain enumerated surcharges in connection with the sale of international ocean freight forwarding services.
   'It is Panalpina's position, which is supported by economic evidence, that the infringements likely did not affect prices paid by Panalpina's customers,' the company said in a statement. 'Administrative proceedings related to such conduct are still ongoing in the European Union, in Switzerland and New Zealand. In Brazil authorities announced preliminary investigations against the freight forwarding industry in mid August 2010. Respective cases in Canada and Australia have been dropped.'
   Panalpina said it has instituted a new company compliance structure 'aimed at ensuring rigorous adherence to competition and other laws throughout the world.'
   Kuehne + Nagel said its charges related 'to conduct of five of its subsidiaries in establishing certain surcharges for international air freight forwarding services' to the United States.
   'Kuehne + Nagel takes its obligation and commitment to abide by all laws including the antitrust laws very seriously,' said Karl Gernandt, executive vice chairman of Kuehne + Nagel International AG. 'Kuehne + Nagel has reviewed and reinforced its antitrust compliance program, to always ensure compliance with the highest available standards.'
   'Reaching this resolution with the United States Department of Justice and putting this aspect of the investigations behind us is an important step,' said John Pattullo, CEVA's chief executive officer.
   'CEVA's board and management are firmly committed to promoting a culture of compliance with all applicable laws and regulations across its global business. At CEVA, we have a 'zero-tolerance' policy towards compliance failures,' Pattullo added.
   CEVA said that since it acquired EGL it has greatly enhanced its global compliance function and global compliance programs and training, including issuing a new code of business conduct and enhancing its antitrust and competition law policy and procedures.