US Indicts Cargolux Execs For Price Fixing

October 29, 2010

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Two senior executives with Luxembourg-based Cargolux Airlines have been indicted on charges of conspiring to fix surcharge rates on air cargo shipments to and from the United States, the US Justice Department said.

Ulrich Ogiermann, chief executive of Cargolux, and Robert Van de Weg, senior vice president of sales and marketing, were accused of conspiring with others to stamp out competition by fixing fuel, security and other surcharges billed to customers, according to an indictment returned by a federal grand jury in Miami.

Ogiermann participated in the conspiracy from about October 2001 until at least February 2006, the indictment said.

According to the document, Van de Weg was part of the conspiracy for at least three years, from December 2003 to February 2006.

If convicted, both executives could be sentenced to up to 10 years in prison and a USD$1 million fine.

In a separate case, four former airline executives of competing air cargo carriers were indicted by a Miami grand jury on charges of conspiring to fix fuel surcharges on shipments.

The indictment charges that the men and co-conspirators agreed to increase their fuel surcharges on air cargo shipped from the United States to South and Central America following Hurricanes Katrina and Rita.

In September, six international freight forwarding companies agreed to plead guilty to price fixing and pay a total of USD$50.3 million in criminal fines, the US Justice Department said at the time.

In those plea agreements, BAX Global agreed to pay a fine of USD$19.7 million; Panalpina World Transport to pay USD$11.9 million; Kuehne + Nagel to pay USD$9,865,044; EGL to pay USD$4.5 million; Schenker to pay USD$3.5 million; and Geologistics International to pay USD$687,960.

The companies arrange cargo delivery for customers.

New Zealand reached a similar settlement in early September with Schenker, Bax Global, Kuehne + Nagel, Panalpina and EGL Geologistics.

Antitrust enforcers in the United States, Europe and elsewhere have price-fixing probes under way in the air cargo business.

Eighteen airlines have pleaded guilty or agreed to do so in connection with the investigation.

In Brussels, British Airways could face a fine of EUR€80 million (USD$112 million) early next month for price-fixing.

The European Commission charged BA, Air France-KLM, SAS and several other airlines in December 2007 with taking part in an air freight cartel.

Lufthansa previously said it had immunity as it alerted the Commission to the cartel.