European antitrust officials on Wednesday fined 13 of the world’s largest logistics companies, including Kuehne + Nagel, Panalpina and UPS, a total of $225 million for fixing international air cargo rates, currency adjustments and peak-season surcharges.
The EU’s Executive Commission said the companies operated four cartels on major routes between Europe and the U.S., China and Hong Kong between 2002 and 2007.
Deutsche Post’s DHL Forwarding unit participated in the cartels but wasn’t fined because it alerted regulators of their activities. Fines on Deutsche Bahn’s Schenker and BAX units, Netherlands-based CEVA, Kuwait’s Agility and China’s Yusen Shenda Air and Sea Service were reduced by 5 to 50 percent to reflect “their cooperation and the extent to which the evidence they provided helped the Commission to prove the respective cartels.”
UTi Worldwide, DSV Air and Sea, Nippon Express (China), Kintetsu World Express and Hellmann Worldwide Logistics also were fined.
“In times of crisis, it is all the more important to stamp out the hidden tax that cartels impose on our economy,” European Competition Commissioner Joaquin Almunia said. “These cartels affected individuals and companies shipping goods on important trade lanes. Many European exporters and consumers of imported goods may have been harmed as a result. “Companies should be aware that crossing the line and colluding on prices comes at a high price, as today’s decision illustrates.”
K+N said it is weighing an appeal against a $71.5 million fine on the Swiss-based logistics company for participating in all four cartels. CEO Karl Gernandt said the commission had drawn “incorrect factual and legal conclusions.”
“In addition, Kuehne + Nagel’s comprehensive cooperation throughout the investigation was not adequately acknowledged,” he said. “That is why we take into consideration to appeal against the decision before the European courts.”
Swiss-based Panalpina said it reserves the right to appeal its $61.4 million fine. “It is Panalpina’s position, which is supported by independent economic evidence, that the infringements likely did not affect prices paid by Panalpina’s customers.”
“UPS’s practice is to cooperate fully with government investigations and we continue to do so,” said the U.S. package delivery company, which was fined $13 million.
The logistics companies took specific measures to conceal their cartel behavior, according to the commission, which launched an investigation after raiding the companies’ offices in 2007.
One of the cartels organized their contracts through a so-called Gardening Club and code names based on the name of vegetables — such as asparagus and baby zucchini — were used in talks about fixing prices, the commission said.
Another cartel set up a Yahoo e-mail account to facilitate exchanges when setting currency adjustment factors, it said.
Contact Bruce Barnard at firstname.lastname@example.org.