Forwarders seek to challenge EU fines

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European freight forwarders are looking at challenging fines announced by the European Commission for price fixing in the air cargo market.

Kuehne + Nagel, DSV and Panalpina have all said they are studying the findings with a view to launching appeals.

The European Commission has fined 14 international freight forwarders a total of  169m euros for price fixing in the air cargo market between 2002 and 2007.

Kuehne + Nagel, which has been fined a total of 53.7m euros, has challenged the commission’s conclusion.

“We will carefully consider the decision of the EU Commission and its rationale,” said Karl Gernandt, chairman of Kuehne + Nagel International AG.

“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.”

DSV, which bought ABX Logistics, said it would assess the reasoning of the decision and consider the possibilities of bringing the case before the courts.

It has been fined 379,000 euros and said that it intends to seek reimbursement of the financial loss from the previous owners of ABX Logistics in accordance with the agreements made with these parties. On this basis, DSV believes that the case will have no material impact on the financial position of the group.

Panalpina said it would analyse the Commission’s decision given its right to appeal the decision to the European General Court. The Group has so far made no provision for the penalty of 46.5m euros as it was not in a position to predict the outcome of this proceeding and to assess its financial exposure.

“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.”

The commission said that the companies had participated in four distinct cartels aimed at fixing prices and other trading conditions for international air freight forwarding services, in breach of EU antitrust rules. It said the companies involved include:
Agility Logistics
Beijing Kintetsu World Express
Ceva and EGL
DHL Global Forwarding
DSV Air & Sea
Expeditors Hong Kong
Hellmann Worldwide Logistics
Kuehne + Nagel
Nippon Express
UTi Worldwide
Toll Global Forwarding
UPS Supply Chain Solutions (as successor of Menlo Worldwide Forwarding)
Yusen Shenda Air & Sea Service (Shanghai)

Deutsche Post (including its subsidiaries DHL and Exel) received full immunity from fines. Deutsche Bahn (including Schenker and BAX), Ceva, Agility and Yusen received reductions of fines ranging from 5 to 50 per cent. The reductions reflected the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the respective cartels.

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