Thursday, January 7, 2016

Freight Forwarding Class Action Suit Sees Another Huge Fine for Parcel Carrier

Litany of Disastrous Costs Just Goes on and On
Shipping News Feature
US – In the latest settlement in a long-running federal antitrust case regarding an international air freight forwarding price-fixing conspiracy, a New York court has given preliminary approval to a $53 million class settlement between global freight forwarding company DHL and a group of its customers, which, if given final approval, will bring the total of settlements in the case to over $350 million and will see DHL exit the litigation.

The purchasers alleged that shortly after the 11 September 2001 terrorist attacks, several freight forwarding companies conspired to pass on all post-9/11 surcharges to their customers by agreeing to fix, inflate and maintain several subsequently arising surcharges for US freight forwarding services. In 2008 in the US District Court for the Eastern District of New York, a group of businesses filed a claim against a long list of what reads like a who’s who of international freight forwarders claiming that the companies all violated antitrust laws on numerous shipping routes around the world.

As part of the settlement, the German headquartered express parcel firm has agreed to aid the plaintiffs in pursuing the antitrust claims against the remaining defendant, Hellmann Worldwide Logistics, though a deal in principle has already been reached and is expected in the near future. DHL’s cooperation will include ‘providing declarations or affidavits, authenticating exhibits, and producing trial witnesses’.

In the first round of settlements the Court approved ten payments totalling $105 million with the next wave of settlements totalling $197 million (not counting this DHL agreement), some of which are currently awaiting approval. Schenker, Vantec, EGL, Expeditors, Nishi-Nippon, United Aircargo, Kuehne + Nagel, Morrison Express, UTi and ABX Logistics were all part of the first round of settlements. The second round involves SDV, Panalpina, Geodis, DSV, Jet-Speed, Toll, Agility, UPS, Dachser, DHL (an earlier agreement for Japanese claims), and a group of Japanese Defendants: Hankyu Hanshin, JAFA, Kintetsu, K Line, MOL Logistics, Nippon Express, Nissin, Yamato, and Yusen.

A complete list of those companies accused is viewable here and, although both rounds of settlements agreed so far appear complete, companies which feel they have been affected by this case have until 31 March 2016 to lodge their claim forms.

This case is in re: Precision Associates, Inc. v. Panalpina World Transport – Case No. 1:08-cv-00042 (E.D.N.Y.) (JG) (VVP)