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Geologistics fined $2.5 mln in air cargo cartel case

Freight-forwarder Geologistics fined $2.5 mln in air cargo cartel case

By Paul McBeth

Dec. 22 (BusinessDesk) – Geologistics International (Bermuda) Ltd., the second American freight company to reach a settlement over an alleged air cargo cartel, has been fined $2.5 million for its role in fixing freight forwarding prices.

The company admitted breaching the Commerce Act by entering into a surcharge agreement with rivals that controlled and maintained prices for freight-forwarding between New Zealand and the U.S. The offending was labelled “hard core cartel behaviour” by Justice Christopher Allan in his decision in the High Court in Auckland today. Texas-based freight company EGL Inc. was fined $1.15 million last week.

“The commission is pleased to have worked constructively with the parties to this anti-competitive behaviour,” Commerce Commission General Manager of Enforcement Kate Morrison said in a statement. “Because of the distance from our biggest markets and sources of supply, it is vital that air freight services are subject to competition between freight forwarders.”

Geologistics had already agreed to pay almost US$690,000 to settle price-fixing allegations with U.S. antitrust regulators.

Both freight companies will also pay $50,000 each to cover the regulator’s costs.

The alleged price-fixing has been the subject of antitrust process worldwide, with big settlements from multi-national airlines in Europe and the U.S. Some of the alleged agreements appear to have been in place since 2001.

In 2006, air freight forwarding services in and out of New Zealand generated $450 million in revenue.


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