Bali Cargo news – Another pair of scalps for the United States Department of Justice (DoJ) yesterday with the news that Ulrich Ogiermann and Robert Van de Weg, two executives from Luxembourg carrier Cargolux Airlines International S.A., have received jail terms of thirteen months each for their parts in the air freight cartel activities which have scandalised the industry, after personal indictments against them to which they entered guilty pleas.
Cargolux, from the Grand Duchy and the largest European all cargo airline, has been quick to accept responsibility for its actions, pleading guilty in May 2009 and agreeing a fine of $119 million for its role in conspiring with others to suppress and eliminate competition by fixing and coordinating surcharges, including security and fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments.
According to the indictment, Ogiermann, a ‘special advisor’ to the Company and a former president and CEO, participated in the conspiracy from at least as early as October 2001 until at least February 2006, and Van de Weg, the senior vice president of sales and marketing for Cargolux, participated in the conspiracy from at least as early December 2003 until at least February 2006. Under their plea agreements, Ogiermann and Van de Weg have also each agreed to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.
Including Ogiermann and Van de Weg, a total of 22 airlines and 21 executives have been charged in the Justice Department’s continuing enquiries into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. The two men were charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Unlike many of those found guilty of the charges against them Cargolux has been open about the actions it took at the time. The company has stressed that neither man was accused of making any personal gains from their actions and, while expressing its regret for the executives personally, the company views their decision to plead guilty as a way to finally bring this matter to a controlled close both for them and the company. A search of our archives (type key words like cartel or anti trust in the News Search Box) will reveal the extent to which the freight and logistics sector walks a fine line between cooperation and collusion and this situation extends throughout the entire industry from freight forwarders to ocean container fleets.