DB Schenker is Losing Patience with Cargo Airlines

Deutsche Bahn’s logistics arm DB Schenker has taken legal action in the U.S. against five cargo carriers, claiming high compensation for financial damages caused by illegal price fixing arrangements between 1999 and 2006. The lawsuit has been brought before a court in New York with the judges now deciding the case. Despite the legal proceedings DB Schenker hasn’t closed the door for reaching an amicable solution with the defendants.

´DB Schenker has taken legal action against five cargo carriers involving price fixing allegations  /  source: DB Schenker
´DB Schenker has taken legal action against five cargo carriers involving price fixing allegations / source: DB Schenker

The allegations are based on illegal price fixing on fuel and security surcharges from 1999 to at least 2006 and levied by airlines for cargo transports within the USA and on routes to and from the U.S. DB Schenker’s complaint is directed against five carriers – Air France-KLM, ANA, Cargolux, Qantas, and SAS. “This cartel arrangement has been confirmed by many anti-trust authorities, including the U.S. judiciary, the EU competition commission and others,” stated a DB Schenker speaker. In the U.S., the Department of Justice imposed large fines for most airlines involved in the cartel and even sentenced some managers to terms of imprisonment. “This shows, the legal framework is very clear,” the DB Schenker communications manager emphasized.  

Exhausting negotiations
Having said this he outlined that his company refused to participate in a class action lawsuit many forwarding agents had opted for. Instead, “we tried to negotiate individual settlements with the airlines involved, based on tonnage they carried on behalf of our company in the period under consideration.”

However, this approach to reach an accord which both sides could accept has now been abandoned by the logistics giant. “We talked, talked and talked for more than four years, but the other side refused persistently to settle the case on a consensus-based solution.”
This filibuster strategy obviously preferred by the airlines could turn into a backburner, making it much more expensive for them at the end of the day, if the New York judges should find them guilty and decide in favor of DB Schenker’s claim for damage. A high-risk maneuver by the airlines since all five have already admitted long-time price-fixing activities to the detriment of their best customers, the forwarding agents.

The logistics giant shows its colors in the U.S.  /  source: DB Schenker
The logistics giant shows its colors in the U.S. / source: DB Schenker

Delaying tactics could become expensive
The DB Schenker speaker wonders: “They all refused to get this issue off the table despite their knowledge of the legal situation and the indisputable fact that we are one of their prime clients.”
Being fed up to the back teeth with the airline’s delaying tactics, DB Schenker’s Berlin headquarters now decided to go to court to make the case a subject of judicial review.
Asked by CargoForwarder Global about the expected compensation payments estimated by his enterprise the speaker declined to specify the financial volume.

Tough stance on anti-trust activities
Despite not commenting on any figure he didn’t really object that an amount in the region of 400 to 600 million euros payable by the five airlines to one of their top clients once convicted. “We at Deutsche Bahn and DB Schenker are fed up with being messed around by cartels, be it in air freight, by building railway infrastructure or at any other business sector in which we are active. Once realized and evidenced by us we bring those responsible to justice without further discussion.” 
Clear words! However, in the price-fixing case he wouldn’t exclude reaching a last minute out-of-court settlement between his enterprise and the defendants. “Our door is still open for negotiations,” he indicates his firm’s basic willingness to close this disreputable chapter once and for all.
But it needs two to tango – in this case even more.

Heiner Siegmund

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Comments: 1
  • #1

    Saleheen (Tuesday, 26 August 2014 06:00)

    ...big airlines, does not even care about their reputation....the wrongdoer should be punished to set an example for the others, who think that biz and money making are bigger than reputation and clients confidence....good job done DB Schenker....go ahead and teach them a lesson...justice is blind...and is equal for all....