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EU fines UPS and others with $225 million


The European Commission fined 14 air-freight-forwarding companies, including United Parcel Services Inc., Switzerland-based Panalpina Welttransport (Holding) AG and local rival Kuehne + Nagel International AG, a total of €169 million ($225 million) for operating a cartel on several routes.

The EU's antitrust body said it would exempt Deutsche Post AG's unit DHL Global Forwarding and Exel from fines because it informed the regulator about the collusion.

The probe concerned price-fixing in four separate cartel infringements, including freight-forwarding services from the U.K. to outside the European Economic Area; from the EEA to the U.S.; from China to the EEA; and from southern China and Hong Kong to the EEA.

The Commission launched surprise raids of the companies in October 2007.

Kuehne + Nagel was fined about €54 million in total; Panalpina was fined just under €50 million and UPS was fined about €10 million.

EU antitrust commissioner JoaquĆ­n Almunia said the companies involved were "fully aware" of the illegal activities they were engaged in. "These cartels affected individuals and companies shipping goods on important trade lanes," he said. "Many European exporters and consumers of imported goods may have been harmed as a result."

German logistics and mailing company Deutsche Post had always said its DHL Global Forwarding division had immunity from any antitrust fines that the commission may impose on guilty companies as it was the first one to reveal the existence of the cartel to the Brussels-based antitrust authority in 2007.

Freight-forwarding consists of organizing the transport of goods including customs clearance, warehousing and ground services. It is traditionally a low-margin, equipment and labor-intensive industry.

The cartel investigation, which was launched in 2007, could fundamentally change the way these companies cooperate, industry officials have said.

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