Another Air Freight Cartel Penalty Finalised

NEW ZEALAND – As reported on the 17th December the anti trust suit against the air freight carriers who colluded to impose surcharges on clients shipping cargo via their services continues. After EGL received a NZ$1.15 million penalty last week, the second of the companies who offered evidence to the Commerce Commission in an attempt to reduce any penalty, have now been told their fate.

Much has been made in the native freight press of the NZ$2.5 million fine imposed today on Geologistics International (Bermuda) Limited, who are referred to unanimously as ‘an international freight forwarder’ which, at the time of the offences may have been correct. In 2005 the takeover of Geologistics by Agility Logistics, the Kuwait based forwarder was completed and, since the criminal case was first mooted in 2007, Geologistics have shed their identity and vanished from the web except for a link to the Agility site.

Now, several other major forwarding groups await their fate after it became clear, assisted by evidence from EGL and Geologistics executives, that there had been a widespread agreement to institute the Air AMS surcharge levied on air freight consignments between New Zealand and the United States. As with EGL, Geologistics also have to pay NZ$50,000 in litigation costs.

Kate Morrison, the Commerce Commission’s General Manager of Enforcement said of the case today:

“The cost of airfreight is very important to New Zealand exporters and importers. Because of the distance from our biggest markets and sources of supply, it is vital that air freight services are subject to competition between freight forwarders. The Commission is pleased to have worked constructively with the parties to this anti-competitive behaviour. Wherever we can, we prefer to halt harmful conduct and restore competitive conditions, and achieve appropriate deterrent penalties without the need for litigation.”

A Commission statement also indicates that more settlements with the offending companies are anticipated in the near future.