Schenker chases price-fixing compensation

German multinational logistics provider Schenker AG has filed lawsuits seeking $2.5 billion in damages from air cargo carriers found guilty by competition authorities.    German multinational logistics provider Schenker AG has filed lawsuits seeking $2.5 billion in damages from air cargo carriers found guilty by competition authorities around the world of colluding to fix prices, the company recently announced.
   About $370 million in damages will be sought in the United States and $2.19 billion in Germany, including interest. The U.S. portion could increase to an estimated $1.1 billion if the court awards treble damages in the case.
   Eight years ago, competition authorities in the United States, European Union, Australia, Canada and South Korea raided the offices of airlines to collect evidence of antitrust violations. More than two dozen airlines were subsequently charged in various countries with conspiracy to fix prices on fuel and security surcharges for air cargo shipments between late 1999 and 2006. A number of airlines have pleaded guilty and paid more than $1.8 billion in criminal fines in the United States alone.
   Victims, usually freight forwarders, have also sued the airlines to recover losses from the illegal activity, alleging the cartel increased global shipping prices. 
   In August, Schenker, a subsidiary of German railway company Deutsche Bahn, filed a complaint against Air France, KLM, Martinair, Cargolux, Qantas, SAS and All Nippon Airways in the Eastern District of New York. The complaint alleges that the airlines violated antitrust laws by coordinating surcharge pricing for international and domestic U.S. shipments. All the defendants pleaded guilty in the U.S. Justice Department investigation.
   In December 2013, Schenker, which operates a large air freight forwarding division, filed suit in Germany against Lufthansa, British Airways, Singapore Airlines, Swiss Airlines, Cargolux, SAS, Air Canada, Cathay Pacific, Japan Airlines, LAN Airlines and Qantas for participating in the same conspiracy in Europe.
   A number of air cargo carriers operating in the United States have entered into settlement agreements with class action plaintiffs and individual claimants in order to avoid protracted lawsuits. In mid-October, for example, Asiana Airlines agreed to pay $55 million to direct purchasers of air cargo shipping services to bow out of the class-action litigation. In February, Hong Kong airline Cathay Pacific agreed to pay shippers $65 million to settle a complaint over alleged price-fixing. Cathay Pacific also paid $60 million in fines to the U.S. government. In December, Korean Air Lines and Singapore Airlines agreed to settlements totaling almost $207.5 million. In all, 25 defendants have settled for more than $900 million.
   In October, a judge issued a decision recommending that the Eastern District Court of New York approve class certification for the remaining defendants for purposes of going to trial, suggesting that there was compelling evidence of a global conspiracy. Class certification will allow thousands of claims to be considered at one time. 
   Schenker said it has agreed to settlements with some carriers, but opted out of settlement agreements with the named defendants in the class action lawsuit.

This column was published in the January 2015 issue of American Shipper.