The European Commission has fined 14 logistics firms a total of €169m ($225m) today for involvement in four cartels that fixed air freight forwarding prices over a five-year period between 2002-2007. This week's fines follow charges brought against the companies in 2010.
The list of companies includes DB Schenker, Expeditors, Hellman Worldwide Logistics, Kuehne + Nagel, Panalpina and UPS. DHL Global Forwarding, which took part in the alleged collusion but alerted the regulator to the activities, will escape a financial penalty according to the Commission.
Deutsche Bahn (including Schenker and BAX), Ceva, Agility and Shenda Air & Sea Service received reductions of fines ranging from 5% to 50%. The reductions reflected the timing of their cooperation and the extent to which the evidence they provided helped the to prove the respective cartels said the Commission in a statement.
Commission vice president in charge of competition policy, Joaquín Almunia, said: "In times of crisis, it is all the more important to stamp out the hidden tax that cartels impose on our economy. 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."
According to the EC, the four separate cartels established and coordinated four different surcharges and charging mechanisms, which are component elements of the final price billed to customers for services. It said in most cases the forwarders took specific measures to conceal nefarious behaviour.
However, Kuehne + Nagel, which received a fine of €53.7m for involvement in all four of the cartels, stated that the Commission had not correctly investigated the facts.
"We will carefully consider the decision of the EU Commission and its rationale," said Karl Gernandt, chairman of Kuehne + Nagel International. "However, already now we are of the opinion that the Commission has not correctly investigated the facts and the participation of Kuehne + Nagel, and has drawn significantly incorrect factual and legal conclusions.
"In addition, Kuehne + Nagel's comprehensive cooperation throughout the investigation was not adequately acknowledged. That is why we take into consideration to appeal against the decision before the European courts," added Gernandt.
Offering its own statement, Deutsche Bahn, which received a fine of almost €35m, said the company, including its Schenker and BAX divisions, had cooperated closely with the EC's investigation and had received reduced penalties as a consequence. The company said that since the charges were brought in 2010 it had established an extensive trust compliance programme that met international standards and that those managers involved in the cartel activity had been dismissed from the company.
However, it also stated that it will examine the EC's finding and will decide on what measures to take going forward.
Similarly Panalpina stated that it will analyse the Commission's decision and review its right to appeal the decision. The company said it had made no provision for the penalty of €46.5m "as it was not in a position to predict the outcome of this proceeding and to assess its financial exposure".
The company added that it had independent economic evidence to support its position that "the infringements likely did not affect prices paid by Panalpina's customers".
