Yusen Contests Anti-Monopoly Fine

Japan's Yusen Air & Sea Service said April 17 it is contesting a fine levied by the nation's anti-monopoly watchdog for its alleged role in a cartel to raise air cargo charges.

The Japan Fair Trade Commission ordered 12 international freight forwarders, including YAS, last month to pay a total of about $91.3 million in administrative fines for forming the cartel.

YAS, the core logistics unit of Nippon Yusen Kabushiki Kaisha (NYK Line), Japan's biggest shipping firm by group sales, was ordered to pay a fine of $17.4 million.

After "scrutinizing, confirming and carefully examining" the JFTC's cease-and-desist and fine orders over the case, YAS has concluded that it cannot accept the orders, the Tokyo-based company said in a statement.

Therefore, YAS formally decided at an extraordinary board meeting on Friday to file a complaint with the JFTC, demanding that the anti-monopoly authority initiate quasi-judicial hearings to review the orders, the company said.

Among the 12 companies punished by the JFTC over the case are the nation's three biggest international freight forwarders -- Nippon Express Co. and Kintetsu World Express as well as YAS.

The JFTC claimed that the 12 international freight forwarders illegally restricted competition by forming a cartel to add fuel surcharges and airport security charges to air cargo service charges.

YAS is only the second of the 12 companies to decide to file a complaint with the JFTC. Nishi-Nippon Railroad Co., based in Fukuoka City, Fukuoka Prefecture, western Japan, also announced such a decision on Thursday.

Meanwhile, YAS also said on Friday that it has revised downward its earlier group revenue and profit forecasts for fiscal 2008, which ended on March 31. The company cited lower-than-expected transaction volumes of international cargo to and from Japan in the January-March quarter and the need to post an extraordinary loss stemming from the fine payment ordered by the JFTC.

YAS now projects $1.7 billion in group revenue, down 1.8 percent from the previous forecast made on Jan. 30. The company's revised profit projections are: $46.1 million in operating profit, down 8.6 percent; $53.9 million in ordinary profit (similar to pre-tax profit under the U.S. accounting standards), down 10.8 percent; $10.9 million in net profit, down 65.7 percent.