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Freight Forwarders Fix Prices, Pay $50 Million Fine
Six international freight forwarders agreed to plead guilty to price-fixing charges and pay a $50.27 million fine.
WASHINGTON — Six international freight forwarders have agreed to plead guilty and to pay criminal fines totaling $50.27 million for their roles in several conspiracies to fix a variety of fees and charges in connection with the provision of freight forwarding services for international air cargo shipments.
According to charges filed separately today in U.S. District Court for the District of Columbia, six companies–EGL Inc., a Houston-based company; Kühne + Nagel International AG, based in Schindellegi, Switzerland (K+N); Geologistics International Management (Bermuda) Limited, based in Hamilton, Bermuda; Panalpina World Transport (Holding) Ltd., based in Basel, Switzerland; Schenker AG, based in Essen, Germany; and BAX Global Inc., a Toledo, Ohio-based company–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 during various periods between 2002 and 2007.
Under the plea agreements, which are subject to court approval, the six companies have agreed to pay the following criminal fines: EGL, $4,486,120; K+N, $9,865,044; Geologistics, $687,960; Panalpina, $11,947,845; Schenker, $3,535,514; and BAX Global, $19,745,927. Each company has also agreed to cooperate with the ongoing antitrust investigation.
Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers and steamship lines, preparing shipment documentation, and providing related ancillary services.
“The 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 Antitrust Division. “Our investigation continues in this important industry.”
The six alleged conspiracies being charged today are: a global conspiracy that took place from March 2003 to October 2007, to impose an Air Automated Manifest System (AAMS) fee on international air shipments of cargo to the United States, in which EGL, Geologistics and Panalpina and others participated; a conspiracy that took place from July 2004 to October 2007, to impose an AAMS fee on shipments from Germany to the United States, in which K+N, Schenker and others participated; a conspiracy that took place from March 2004 to October 2007, to impose an AAMS fee on shipments from Switzerland to the United States, in which K+N and others participated; a conspiracy that took place from October 2002 to October 2007, to impose a New Export System (NES) fee on international air shipments from the United Kingdom to the United States, in which EGL, K+N, BAX and others participated; a conspiracy that took place from July 2005 to June 2006, to impose a Currency Adjustment Factor (CAF) on international air shipments from China to the United States, in which K+N, Panalpina, Schenker, BAX and others participated; and a conspiracy that took place from August 2005 to December 2007, to impose a Peak Season Surcharge (PSS) on shipments from Hong Kong to the United States, in which K+N, Panalpina, Schenker, BAX and others participated.
Each company is charged with violating the Sherman Act by engaging in a conspiracy to fix prices, and the companies have agreed to cooperate with the ongoing investigation.
RELATED: Japanese Freight Forwarder Cracks Under Price-Fixing Pressure
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release ↗
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