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Published: Friday, 10/1/2010

BAX Global Inc. to pay $19.7M fine in price-fixing case

BLADE STAFF AND WIRE REPORTS

BAX Global Inc. has agreed to pay more than $19.7 million in criminal fines in a price-fixing case involving six freight-forwarding companies.

The company agreed to plead guilty to three conspiracies involving fees and charges for international air cargo shipments, a statement from the U.S. Department of Justice said. The department said the charges stemmed from an antitrust investigation of the freight-forwarding industry.

BAX Global operates a North American air-cargo hub at Toledo Express Airport.

The company is a subsidiary of German transport and logistics giant DB Schenker, which is owned by Deutsche Bahn, the German national railway.

Other freight companies charged in the investigation are Schenker AG, another Deutsche Bahn subsidiary based in Germany; EGL Inc. of Houston; Kuhne + Nagel International AG, based in Switzerland; Geologistics International Management (Bermuda) Limited, based in Bermuda, and Panalpina World Transport (Holding) Ltd., based in Switzerland. The six firms will pay $50.27 million total in fines.

Freight-forwarding companies arrange for cargo to be hauled by transportation providers.

The government said BAX conspired with Kuhne + Nagel, EGL, and other firms to impose a "new export system" fee on international air shipments from the United Kingdom to the United States from October, 2002, to October, 2007. BAX also was accused of conspiring with several firms to impose fees on international shipments from China and Hong Kong into the United States. The Chinese fees, called a "currency adjustment factor," occurred from July, 2005, to June, 2006; the Hong Kong fee, called a "peak season surcharge," occurred from August, 2005, to December, 2007, according to the Justice Department.

BAX Global has cooperated with the government's investigation since it began about three years ago, said Brian Lynch, general counsel for DB US Holding Corp., BAX's parent company.

Mr. Lynch said the plea agreement is subject to federal court approval, which is expected to occur this month. Further details of the plea agreement will be released at that time, he said.

The Justice Department did not return requests for comment.



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