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Kuehne+Nagel and Panalpina fined for EU Freight Cartels

Brussels:  Kuehne & Nagel International and Panalpina World Transport Holding are among companies fined 169m euro ($225.6m) by European Union regulators for price fixing of freight-forwarding surcharges.

Kuehne+Nagel businesses were fined 53.7m euro and Panalpina 46.5m euro, the European Commission said yesterday.  United Parcel Service (UPS), Apollo Management LP’s Ceva Group Plc, UTi Worldwide, Expeditors International of Washington, Nippon Express, Agility and DSV were also punished by the EU for operating four separate cartels from 2002 to 2007, the agency said.

EU competition commissioner Joaquin Almunia told reporters.“Because the businesses that used freight forwarders to import and export goods are numerous, the negative consequences on the whole economy are very clear.”

“Ultimately the final consumer of the goods transported may also have to pay higher prices.”

Freight forwarders fixed prices for fees charged on goods sent on trade routes between the EU,US and Asia, according to Almunia. They agreed on a “peak season” surcharge in the run-up to Christmas, he said. Other fees covered export charges introduced by the UK and the US and extra costs when Chinese currency appreciated against the US dollar in 2005.

Almunia said the companies were “fully aware” of their illegal actions and tried to conceal them by describing their contacts as a “gardening club.” They used code names based on vegetables such as asparagus and baby courgettes. They also used a Yahoo! Inc. e-mail account to discuss rates, the EU said.

Deutsche Post AG, based in Bonn, and its subsidiaries DHL and Exel received immunity from fines after informing regulators about the cartel, according to the company and the EU. Deutsche Bahn AG and its Schenker and Bax units, Ceva, Agility and Japan’s Yusen Air & Sea Service Co received fine reductions for cooperating with regulators. Units of Kintetsu World Express, Toll Global Forwarding and Hellmann Worldwide Logistics also were fined.