DB Schenker Parent Deutsche Bahn is Hunting Cargo Airlines

German railway giant Deutsche Bahn has taken dozens of cargo carriers to court in antitrust lawsuits filed in New York and Cologne. Meanwhile, more firms have joined in supporting the judicial battue, among them BMW, Robert Bosch, K+N, Panalpina and tyre maker Continental. The hunt is on but with an uncertain outcome.

DB Schenker parent Deutsche Bahn plays hardball with cargo carriers /  company courtesy
DB Schenker parent Deutsche Bahn plays hardball with cargo carriers / company courtesy

Asked about the financial damages caused by the international cartel of freight airlines acting between 1999 and 2006 a Deutsche Bahn (DB) spokeswoman mentions 2 billion euros plus accrued interests of 900 million euros. “Our direct DB Schenker share amounts to 1.2 billion euros, with interests of 560 million euros coming on top,” she told CargoForwarder Global.

Claims could ground carriers
Unknown to this point is if the other plaintiff supporters have presented the courts additional financial claims. If so, it would pile up the already sky-rocketing damage compensations even more.
But apart from this aspect, the sums that are at stake are huge anyhow and could break the neck of some of the affected carriers should DB and their allies prevail in the lawsuit. If so, uplift capacity would be reduced with negative consequences for shippers and their forwarding agents.
Presumably, this specific aspect doesn’t really interest law firm Freshfields, Bruckhaus and Deringer. According to information obtained by CargoForwarder Global, their lawyers have been entrusted by DB with this judicial case. As is usual in legal transactions their fees depend on the outcome of the lawsuit. Therefore, it’s of their utmost interest to obtain a favorable ruling by the New York and Cologne judges.
But will they succeed? Experts are doubtful. 

Who’s been damaged – if at all?
Fact is the matter is extremely complicated. The judges don’t have to decide whether cargo airlines have fixed prices on fuel and security surcharges over years, which courts have meanwhile confirmed on various occasions, but to determine the exact amount of damages occurred. For example, what amount of repayments does a 9 hour cargo flight from Frankfurt to Atlanta come to carrying – say – 45 tons on behalf of the plaintiffs on a certain day in March of 2004, in contrast to a 6 hour flight between Hamburg and Dubai with 18 tons aboard half a year before or later? Also, the judges will have to decide in case they rule in favour of DB Schenker and the DB supporters whom the extra money cashed in by carriers stemming from price fixed surcharges belongs to at the end: is it DB Schenker or the agent’s clients - the shippers, who paid the transport bill ultimately? When confronted with this issue by CargoForwarder Global, DB refused to comment.

The incalculable time aspect
Also, it would be of great media and public interest to know which commission DB Schenker added to the individual transport costs incurred, including the contested surcharges.
An expert states: “It really needs extremely specialized judges who are familiar with this highly complex and complicated subject to make a fair judgment.” 
But even if so the case would presumably be transferred to the next court level by the unsuccessful party.
In this case the time aspect comes into the game. Until a final ruling is pronounced it might take half a dozen or even more years.

No claims received by SIA Cargo
So far, the defendants remain quite relaxed. From all what’s known the carriers haven’t established any provisions in respect of the litigation as the eventual outcome of the case is uncertain at this stage. Despite DB’s spectacular public announcement taking the cargo cartel to court and demanding huge compensation payments the accused carriers are still stumbling around in the fog. “In respect of the claim announced by Deutsche Bahn, Singapore Airlines Cargo has not received any claim documents from the court in Cologne,” CargoForwarder Global was informed exclusively by a spokesperson of Singapore Airlines. She went on to say: “Singapore Airlines Cargo will consider its next steps if and when the claim documents are successfully served on it.”

DB hardliners have taken over
And what is DB Schenker say to all this?
They seem to be everything but happy with their parent DB’s rushing forward. “While discussing this issue internally we made clear that we are not in favor of this plea. However, at the end we were overruled by our parent,” CargoForwarder was told confidentially. It seems that the hardliners have taken command at the firm’s Berlin HQ. The above was left without official comment from Deutsche Bahn but a speaker of the compliance communication team said, when asked by CargoForwarder Global about the motives for their announced judicial move: “Whenever we are sued by a cartel we take the firms to court, without exception.”

DB Schenker is not a ‘Mr Clean’
In this respect it should be recalled that until shortly DB Schenker belonged to an anti-trust cartel forwarding agents had established in Austria. Despite the offence, the DB daughter got away unpunished by receiving immunity under the leniency notice.
Three years back, the EU Commission fined 14 logistics firms for building an illegal cargo cartel. Among the convicted that had to pay 160 million euros of penalty charges to Brussels were well-known names such as Panalpina, UPS, K+N – and also DB Schenker!

Heiner Siegmund

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Comments: 1
  • #1

    Radharamanan Panicker (Friday, 06 February 2015 02:38)

    This is a very interesting but highly disturbing legal suit because it is going to damage the industry greatly. Whom are they fighting for. For themselves because they went into loss by some action of the Carriers or for the interest of their client as you rightly pointed out. It may lead to dramatic change in the way the distribution channel is currently set up where the carriers dont go directly to the shipper but have a broker in between in form of the freight forwarder. If i were the Carrier, i would soon be asking as to why i need the freight forwarder to sell my cargo space. I will sell directly to the shipper. In the age of e-freight, the processing of cargo will become simpler and one wonders whether there is a need for the services being provided by the Freight Forwarders.
    It is not to say that the airlines are clean. They brought this uncertainty upon themselves.
    Maybe time has come to bring transparency in the whole aspect of pricing in the industry.
    In the meanwhile we wait and watch