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Japanese Freight Forwarding Companies Fined For Conspiracy to Fix Prices

Fines totaling $18.9 million were slapped on a pair of Japanese air freight forwarding companies by the U.S. Department of Justice in a recent ruling.

“K” Line Logistics and Yusen Logistics agreed to pay $3.5 million and $15.4 million respectively in a guilty plea agreement after charges were brought against the pair by the U.S. Justice Department’s Antitrust Division.

Specifically, the two firms which process goods heading to the U.S. from Japan, were charged with conspiring to fix service fees, fuel surcharges, and security fees.  The violations of what federal prosecutors cited as the Sherman Act occurred from September 2002 to November 2007.

Before cargo is shipped to the U.S. by Japanese companies, it is first received by air freight forwarders, packaged, warehoused, and documented — among other services provided — and then booked and loaded on air carriers to recipients in the States.

“Consumers were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” said Assistant Attorney General Bill Baer, head of the Justice Department’s Antitrust Division.

“Prosecuting these kinds of global, price-fixing conspiracies continues to be a top priority of the antitrust division,” he said.

To date, 16 companies have already pleaded guilty or intend to as the Justice Department continues to pursue its investigation of the air freight industry.  More than $120 million in fines have been paid so far.

Widespread airline price fixing for both freight and passenger customers reportedly began in 2000 when air traffic and travel declined significantly and carriers sought to replace falling revenues.