Thursday, September 16, 2010

Another Scandal Affecting The Freight Industry - Now It's Truck Manufacturers

Major Companies Stand Accused Of Collusion
Shipping News Feature

UK – WORLDWIDE – We have seen the authorities in countries all over the globe pursuing anti trust cases against air cargo carriers and freight forwarders and now it seems it is the turn of truck manufacturers. The industry is renowned for stiff competition and it appears that the authorities now believe there has been collusion regarding the fixing of prices on commercial vehicles.

Using powers under the Enterprise Act 2002 and the Competition Act 1998, equivalent to anti trust legislation in the US, the Office of Fair Trading have raided the offices of the Daimler group's Mercedes Benz truck division this week and arrested one employee, later released on bail.

Like the air cartel enquiries however it appears this may only be the tip of another, very smelly, iceberg. One cannot have price fixing, be it in air freight or truck manufacture, unless other companies are directly involved. Already MAN in Germany and Scania in Sweden have been spoken to by the authorities according to the Financial Times which broke the story, but now it has been alleged that the names of Volvo and Iveco (Fiat’s truck division) have been mentioned by investigators.

Although the British press are only talking about the OFT investigation our regular readers will know of the slow moving, but persistent methods of the European Competition Commission, headed formerly by the formidable Neelie Kroes and now by Joaquín Almunia. If, like the eye of Sauron, the Commission turn their attention to the matter, expect a drawn out, expensive, but rigorous investigation.

Even under British law if a case for price fixing is proven the penalties can be severe with fines of 10% of turnover for each case and five year terms of imprisonment for guilty perpetrators. In the other cases which affect the freight industry it did not take long for companies to come forward to assist the authorities after promises of reduced action against them or even immunity from prosecution.

Container shipping lines, with wide ranging anti trust immunity, at least for the time being, must be breathing sighs of satisfaction again with the latest news of a related trade once more coming under the spotlight.

Photo: A Mercedes Truck crafted by Italian Designer Luigi Colani