SCDigest Editorial Staff

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Combined with various class action lawsuits against rail, LTL and air cargo providers, shippers have a smorgasbord of potential legal activity – if they choose to join action against their logistics “partners.” What do you say? Send us your comments here

The fallout from allegedly unfair fuel surcharges by transportation providers continues, as the offices of several leading global logistics service providers were raided last week by both Europe and U.S. authorities investigating possible price fixing.

As we’ve reported in Supply Chain Digest, rail carriers in the US are under strong attack for alleged “over recovery” for their fuel surcharge programs. (See Rail Carriers in the Cross Hairs.) LTL carriers in the US are facing similar legal attention.

In 2006, the U.S. Justice Department and European agencies began looking into price fixing by air cargo providers, again related to fuel surcharges. As the probe continues, 15 class action lawsuits have been filed in district courts around the U.S. against United Airlines, American Airlines, British Airways, Air France-KLM, Lufthansa, and others for overcharging cargo fees, mostly related to fuel surcharge practices.

Coming out of the on-going investigation against the carriers, officials apparently found evidence of potential similar evidence by some freight forwarders.

The European Commission said it carried out unannounced inspections of the offices because it has "reason to believe that the companies concerned may have violated EC Treaty rules that outlaw restrictive business practices."

Patrik Ducrey, deputy director of Switzerland's competition authority, said the raids on Kuehne and Nagel, and Panalpina, both headquartered in Switzerland, were triggered by information received from an unidentified person, who tipped EU, U.S. and Swiss authorities to alleged cartel behavior.

Offices of the companies received surprise visits from authorities on both continents. Meanwhile, Germany’s DHL said it had been contacted by government officials, and U.S.-based Expeditors International said it had also received a subpoena from the U.S. Justice Department ordering the company to produce information and records relating to an investigation of air-cargo freight forwarders.

The investigations obviously will be a concern for company officials of the forwarders, as findings of price fixing can result in large fines and in U.S. criminal prosecution. For shippers, however, the actions mean another group of logistics service providers is likely to scale back fuel surcharges under the new cloud of suspicion, and lawsuits will be filed that could result in substantial payments back to shippers from the forwarders if the price fixing is found to have occurred.

Combined with various class action lawsuits against rail, LTL and air cargo providers, shippers have a smorgasbord of potential legal activity – if they choose to join action against their logistics “partners.”

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