Canada fines Cargolux US$2.4 million, US indicts execs, EU fines carriers

CANADA's Competition Bureau has announced that Luxembourg's Cargolux has pleaded guilty in Federal Court and fined C$2.5 million (US$2.4 million) for its role in an air cargo cartel.

Separately, the Cargolux CEO and his top vice president were charged in Miami with conspiring to fix surcharge rates on shipments to and from the United States, the US Justice Department announced.

Cargolux president and CEO Ulrich Ogiermann and vice president Robert Van de Weg are accused of conspiring to eliminate competition, according to an indictment returned by a federal grand jury. If convicted, Ogiermann and Van de Weg face jail terms of 10 years and a US$1 million fines each.

In Canada, Cargolux admitted engaging in a conspiracy to fix air cargo fuel surcharges for international air cargo transportation services from Canada between April 2002 and February 2006, said a statement from Competition Bureau Canada (CBC).

Cargolux's penalty brings the total fines in the CBC's air cargo investigation to more than C$17 million. In 2009, Air France, KLM, Martinair, Qantas, and British Airways each pleaded guilty to fixing air cargo surcharges for shipments on certain routes from Canada. The bureau's investigation into the alleged conduct of other air cargo carriers continues.

Under amendments to Canada's increasing draconian Competition Act, which took effect in March 2010, financial penalties have more the doubled and jail terms nearly tripled, up from C$10 million to C$25 million in fines, and from five to 14 years in jail.

In another case, four former airline executives of competing air cargo carriers were indicted by a Miami grand jury on charges of conspiring to fix fuel surcharges on shipments.

The indictment charges that the men and co-conspirators agreed to increase their fuel surcharges on air cargo shipped from the United States to South and Central America following Hurricanes Katrina and Rita.

In September, six international freight forwarding companies agreed to plead guilty to price fixing and pay a total of US$50.3 million in criminal fines, the US Justice Department said.

BAX Global has been fined US$19.7 million; Panalpina, $11.9 million; Kuehne + Nagel, $9,865,044; EGL Inc, $4.5 million; Schenker (a Deutsche Bahn unit), $3.5 million and Geologistics, $687,960.

New Zealand reached a similar settlement in early September with Schenker, Bax Global, Kuehne + Nagel, Panalpina and EGL Geologistics.

Eighteen airlines have pleaded guilty or agreed to do so in connection with the investigation, including British Airways, Korean Air Lines, Qantas Airways, Japan Airlines, Cathay Pacific Airways, Air France, EL AL Israel Airlines Ltd, Nippon Cargo Airlines Co Ltd and China Airlines.

In Brussels, British Airways could face a fine of EUR80 million (US$112 million) early next month for price-fixing. The European Commission charged BA, Air France-KLM, SAS and other airlines in December 2007 with taking part in an air freight cartel.

Source: SchedNet