Major Forwarders Fined in Air Cargo Price Fixing

Six international forwarders agreed to a total of $50.3 million in criminal fines after pleading guilty to air cargo price fixing, the U.S. Department of Justice said Thursday in an expansion of an antitrust investigation that has enveloped many of the world's largest airlines and forwarders.

The largest penalty hit BAX Global, which will pay $19.7 million to settle charges the company conspired with other forwarders to set fees and surcharges on air cargo shipments.

Others fined were Panalpina ($11.9 million), Kuehne + Nagel ($9.9 million), EGL ($4.5 million), Schenker ($3.5 million) and Geologistics ($687,960).

Since the investigation began, EGL was purchased by CEVA Logistics, Geologistics was bought by Agility and Schenker, a division of Deutsche Bahn, took over BAX Global.

The penalties were the first the U.S. Justice Department has imposed on freight forwarders in an investigation that has led to more than $1.5 billion in fines against major airlines and jail sentences for several former airline cargo executives.

"Our investigation continues in this important industry," said Christine Varney, assistant attorney general in charge of the antitrust division.

Forwarders have been named in other cases around the world. The New Zealand government this month settled cases with Schenker, BAX Global, Kuehne + Nagel, Panalpina and EGL. In February, the European Union filed charges against Kuehne + Nagel, Panalpina and other freight companies.

The department charged the conspiracies took place between 2003 and 2007 and involved agreements on fees such as one for the Air Automated Manifest System, another for use of the New Export System and for a currency adjustment factor and a peak season surcharge.

-- Contact R.G. Edmonson at bedmonson@joc.com.