Last Friday two air freight companies in Japan agreed to plead guilty to charges of fixing air freight prices. As part of their plea they most now pay a combined $18.9 million in criminal fines. The companies were accused of fixing freight forwarding fees for air cargo shipments between the US and Japan.
Yusen Logistics Co. Ltd was fined $15.4 million whereas ‘K’ Line Logistics Ltd. was fined $3.5 million in fines. Counting these two companies, in the continuing investigation of the air cargo business so far 16 companies have pleaded guilty to charges for fixing prices. Together these 16 have had to pay criminal fines of over $120 million.
Bill Baer, the Assistant Attorney General and head of the Antitrust Division of the US Justice Department stated that consumers were paying much higher prices for the everyday items that they need because of the collusive and higher fixed prices that these air freight companies were charging for transport of goods.
He added that one of the top priorities of the antitrust division is to prosecute companies that engage in price fixing of a global nature.
Air freight companies and forwarders are responsible for managing the international and domestic cargo delivery methods and generally package, receive, warehouse and prepare all cargo freight. When it is ready to ship they then arrange the cargo to be shipped via a variety of different air cargo carriers.
According to the charges that were made at the US District Court of the District of Columbia this past Friday, both Yusen and ‘K’ Line Logistics were actively involved in price fixing strategies and added freight forwarding fees to many of their services. They were both found guilty of adding unneeded security fees and fuel surcharges. Customers were the ones that felt the brunt of the price gauging as they had to pay extra for the goods.
Federal Prosecutors states that the companies were able to get away with their price fixing conspiracies by holding discussions and meetings to make sure that they were imposing the same service fees on customers that purchased air cargo services from Japan to the US. Therefore, customers were unaware that the prices were fixed.
In addition, the companies choose to levy their freight fees base on meetings that they held with each other and not based on the actual cost of shipping air cargo from Japan to the US. Thus, the companies plead guilty for violating the Sherman Act.