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DHL blows a whistle

SINGAPORE: Following a whistle-blowing move by DHL Global Forwarding, the Singapore Commerce Commission (SCC) has fined 10 Japanese logistics companies S$7.15 million for price fixing on routes between Japan and Singapore. While part of the scheme, DHL escaped the penalty.

The SCC says the 11 ccompanies fixed fees and surcharges while exchanging pricing and customer information between September 2002 and November 2007. According to the Commission the forwarders agreed to charge shippers the same rate for a Japanese Security Surcharge (JSS), a Japanese Explosives Examination Fee (JEEF) and a Japanese Fuel Surcharge (JFS). The SCC noted: "ThereDHL Singapore is evidence pointing to a significant mark-up in some instances."

In not fining DHL for its participation in the cartel, the Commission acknowledged it relied on the company to provide the necessary evidence to pursue its investigation.

The information included the revelation that after deciding to pass on surcharges to their customers, the group met regularly to discuss their success; exchanged information about their collection ratios; identified customers that wouldn't pay the JFS; and assigned a particular forwarder to negotiate with them.

In applying subsequent penalties, the CCS based its calculation on each company's turnover and willingness to cooperate. As a result Nippon Express and Yusen were fined over S$2 million each while Hankyu Hanshin, Kintetsu World Express, NNR and Vantec received a discount. Forwarders who didn't get a reduced fine also included "K" Line Logistics, MOL Logistics, Nissin and Yamato.

CCS chief executive Toh Han Li commented: "Price fixing among competitors (thus forming a cartel) is considered one of the most harmful types of anti-competitive conduct. It distorts the terms of trade between the cartelists and their customers, with the latter not being able to enjoy competitively determined rates. As an open economy, Singapore businesses are vulnerable to such international cartels."

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