Tuesday, December 2, 2014

Freight Forwarding and Logistics Giant Sues Air Cargo Carriers for Billions of Dollars

Legal Action Started in US and Germany Against Guilty Airlines in Price Fixing Cartel
Shipping News Feature

GERMANY – US – Schenker, the freight forwarding and logistics arm of Deutsche Bahn, is seeking a total of around $2.5 billion in damages, from air cargo carriers found guilty by the US Department of Justice (DOJ), the European Commission and other international antitrust authorities for operating a global price fixing cartel. As we pointed out back in August, when Schenker announced that it had filed a complaint in New York, this matter is steeped somewhat in irony with the pot speaking ill of the kettle after Schenker found itself at the mercy of competition commissions the world over having taken part in the activities of the infamous ‘Gardening Club’ antitrust scandal.

Schenker is pursuing civil litigation in both Germany and the US, in an effort to recover what it says are ‘significant damages’ from air cargo carriers that conspired to fix fuel and security surcharges from 1999 until 2006. The company seeks to recover approximately $2.25 billion in Germany and $370 million in the US, including interest, from the separate civil suits, with an estimated $1.1 billion extra in the US if the court awards treble damages in the case.

In August, Schenker filed a complaint against Air France, KLM, Martinair, Cargolux, Qantas, SAS and All Nippon Airways in the Eastern District of New York. That complaint alleges that, in coordinating surcharge pricing for shipments to, from and within the US, the airlines violated US antitrust laws. All defendants named in the Schenker complaint pleaded guilty in the DOJ proceedings.

The German lawsuit, filed in December 2013 in Cologne, alleges defendants Deutsche Lufthansa, British Airways, Singapore Airlines, Swiss Airlines, Cargolux, SAS, Air Canada, Cathay Pacific, Japan Airlines, LAN Airlines and Qantas were involved in the same conspiracy affecting airfreight shipments worldwide.

A number of air cargo carriers in the United States entered into settlement agreements both with class action plaintiffs and individual claimants in order to avoid protracted civil lawsuits. Schenker agreed to settlements with some carriers but opted out of the settlement agreements by the named defendants in connection with the class action lawsuit, doubtless with a bigger payday in mind.

Schenker AG v. Societe Air France, et al., case number 1:14-cv-04711.