Price Fix Probe Continues
Word last week that Emirates
SkyCargo rejected charges of collusion and is prepared to stand up and
fight in an Australian court that for some reason selected 9/11 as a
return date, can only be greeted as good news amongst air cargo industry
people and airlines that have been sucked into defense, deals and increasing
fines levied by ambitious prosecutors almost everywhere.
However in USA, the never-ending search
for truth, justice and the American way endures, as that cargo price-fixing
probe continues.
To date, the much publicized U.S. Department
of Justice cargo price fixing investigation has generated more than
$1.2 billion in fines from a host of carriers, a record for the department's
antitrust division and almost the only sign that at least one branch
of the U.S. Government is making money instead of giving it away to
the banks or automobile manufacturers,
"American consumers were forced to
pay higher prices on the goods they buy every day as a result of the
inflated and collusive shipping rates charged by these companies,"
Scott D. Hammond, Acting Assistant Attorney General in charge of the
U.S. Department of Justice Antitrust Division said earlier this year.
We have been thinking about that statement
while wondering, where was the U.S. DOJ when oil prices were bankrupting
the industry, and as transportation costs specifically were blamed for
driving the price of a jug of milk to levels that broke budgets of working
class families?
If the DOJ is feeling that aggressive,
they might find time to query how many consumer goods' prices have fallen
since fuel prices now at about 72 bucks a barrel began to fall?
The issue of legality is not to be taken
lightly, but the disparity of punishment visited upon people such as
Bruce McCaffrey (Qantas) and Tim Pfeil (SAS) can't help but challenge
credulity when compared with the lack of same for entities we are reading
about in the news every day, whose offenses have cost workers their
jobs and retirees their pensions.
The high-minded prose from Hammond might
pass as stock script written for the role of " Washington Beltway
Prosecutor" in a community theater production, but simply doesn't
hold up well for anyone remotely capable of critical thinking.
 Bruce
McCaffrey, (right) the former top cargo executive at Qantas Freight
USA for more than 26 years, copped a plea in a bargain deal with DOJ
and received six months as a U.S. government guest inside a federal
prison.
For the record, the 69-year-old McCaffrey
who is partially handicapped as the result of a stroke 15 years ago,
delayed his jail time needing a kidney transplant last October and some
time for recuperation.
So much for the “menace to society.”
notion.
Bruce, in an exclusive interview with
Air Cargo News FlyingTypers predicted that price fixing probes
would continue.
“Investigators want to know about
the business of air cargo,” Bruce said.
“I have spoken to investigators
from Canada and I was interviewed by investigators from New Zealand.
“As often as I am approached now,
I cooperate because of the offer of immunity.”
What Bruce could not say is what is most
apparent.
Ongoing interviews by an even wider group
of law enforcement characters from an ever-expanding list of countries
are serving as primers on how the air cargo industry operates to people
that are descending like a school of sharks smelling blood on the water
as airlines continue to pony up huge fines.
What Bruce did say is that all of this
activity indicates, “My case, it seems is not the end of the price
fixing investigations.
“I believe that there are many more
cases yet to be raised.”
Bruce McCaffrey was the first high profile
airline cargo guy that took a fall as part of a giant international
investigation.
Faced with financial annihilation and
several years in prison, after Qantas left him twisting in the wind
to defend himself, Bruce took the deal to pay a fine, do some time and
tell DOJ and anybody else what he knows.
But a look behind the scene raises some
suspicion that the U.S. DOJ was looking to bring justice to some Qantas
people in Australia for suspected untoward practices.
That effort was thwarted because of treaties
between USA and Australia allowing that these individuals could not
be extradited to USA.
So DOJ apparently brought the full fury
of their probe to the doorstep of the highest Qantas air cargo executive
here.
Call it “body count” law enforcement or what you will.
When you think about it the premise here
of price fixing anything is ridiculous, especially since any carrier
that wants to know about rates has just to offer a service quote to
almost any forwarder who will fast as a flash then quote the rate looking
for a better price from another carrier.
Customers out on the street quote rates
amongst each other and to carriers as leverage to get better rates all
day long is the rule in air cargo and everybody knows it.
“Those who may have been involved
in price fixing for surcharges, were just dumb in light of the market
forces”, said one air cargo executive.
“But it was the deal that some carriers
made with large forwarding companies not to charge surcharge fees, that
put the small and medium size forwarders at a distinct disadvantage
and cost the shipper and consignees more than they should have paid.”
“I can't wait for these mega forwarders
to be taken to task as well,” the executive added.
So what lies ahead ?
With no common sense position, opinion
or attempt at explanation forwarded by any organized group in air cargo,
and most anyone who speaks about the situation insisting in “off
the record” anonymity, it appears prosecutors from an ever widening
circle around the world will continue to make headlines “protecting”
consumers at the expense of air cargo as the circle of discovery gets
wider
Law enforcement should get off the notion
that “an international cartel” as DOJ has termed the probe
has emerged from the level of executives that are now being charged.
Also come to think of it, if the DOJ is
truly trying to protect the American consumer, and not trying to merely
create record fines, then why aren't they putting the fines collected
into an account to distribute as refunds?
“Why is the DOJ concentrating so
hard on the air cargo carriers which, except for the express operators,
have not been largely profitable, instead of also focusing on the air
freight forwarders, the trucking industry or sea cargo?” another
industry observer wonders.
In time, just like the Salem Witch Trials,
perhaps the world will come to know that many of these people and carriers
were really innocent or pawns in a bigger game.
But in the face of these damning charges
who has the resources to fight the mighty U.S. Government, when a few
DOJ people see prosecuting air cargo as their ladder to promotion?
And from us with a lap top, to you at
a desk looking at a computer terminal, or walking back to the job with
a coffee and a wrapped sandwich, or a bowl of noodles just secured from
the cargo area coffee shop or truck, here is something Cassius said,
according to William Shakespeare:
"The
fault, dear Brutus, is not in our stars,
But
in ourselves, that we are underlings."
Geoffrey
|
Air
Cargo News FlyingTypers leads the way again as the world’s first
air cargo publication to connect the industry to the broadly expanding
and interactive base for social commentary—Twitter.
August
28: Marty Peters (87) right, retires
from UPS today (Aug 28) 63 years, five months and 29 days later tenured
as longest employed in company history.
August
28: Air cargo industry in for major
change says report by Jones Lang LaSalle as transport hub real estate
collapses.
August
26: In UK Proposed Network Rail £34bn
($55bn) high-speed line Birmingham & Manchester & London to
Glasgow in two1/4 hours could also carry cargo.
August
26: Wallenborn Transports S.A., road feeder,
air cargo etc., based in Luxembourg acquired Rutges Cargo B.V., based
in Amsterdam.
August
26: Italian transport 2009 reports that Pan-Alpine
cargo lorries via BrennerTun (pictured left) off 20%; FréjustT,
-21%; Grote St-BernardT; -16.3% & Mont BlancT; -11.9%. Elsewhere
Air Cargo, -21%; Ocean, -22%; Rail-31%. As they say in Sweden, Mama
Mia! 
August
26: History alive as American Airlines is
center stage at Flight Path LAX 9/17 10:00. AA Kiwi (74) Polly Goodman
speaker. AA opened LAX in 1946. www.flightpath.us 