Freight forwarders fined millions for price-fixing

Sometimes it pays to cut corners. Sometimes, it ends up costing you.

Worldwide leading freight forwarding companies BAX Global, Schenker and Panalpina found out that lesson the hard way on Tuesday, when fines from New Zealand’s government were handed down, with each fine totaling in the millions.

Panalpina was hit with the largest fine at NZ$2.7 million and NZ$75,000 in costs. BAX Global was ordered to pay NZ$1.4 million and NZ$50,000 in costs, while Schenker will pay the lightest fine at NZ$1.1 million and NZ$25,000 in costs.

The total fines and costs handed out totaled NZ $5.2 million (US$4.2 million).

High Court Justice Christopher Allan said the surcharge agreements were “part of a sustained course of conduct involving covert meetings and communications” in New Zealand.

The breaches in the competition law involved surcharge agreements between the freight forwarding companies and the United States, UK and China.

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The New Zealand High Court had already imposed penalties for similar violations against freight forwarders EGL and Geologistics International. Total penalties to date are NZ$8.85 million, which includes fines levied against Qantas, British Airways, Cargolux and Eva Airways.

The High Court of New Zealand is still investigating global freight forwarding leader Kuehne + Nagel for similar infractions.

 “We are confident the industry has been sent a very strong message that collusion to fix prices is unacceptable,” Kate Morrison, the Commerce Commission’s General Manager of Enforcement, said.