Apr.19--SWISS forwarding giant Panalpina has admitted that the sector has earned its reputation for anti-competitive behaviour, but argues that the image is outdated, according to London's Financial Times.
    The company, together with 13 others were recently fined EUR169 million (US$225 million) by the European Commission for participation in cartels in international air freight forwarding services.
    Panalpina was fined EUR46.5 million, while Kuehne & Nagel, also based in Switzerland, was told to pay EUR53.7 million. Deutsche Bahn and subsidiary Schenker were fined 34.9 million. The various companies operated one of the international cartels based on meetings at an unpretentious Italian restaurant near London and used code words like "fresh marrow" and "asparagus" to disguise illegal surcharges.
    In an interview, Panalpina's chief executive, Monika Ribar, admitted that her company and its peers had a record of cartels and other anti-competitive practices. "It is true our industry has gained a poor record, based on problems in the past. But companies have learned to deal much more seriously with the situation in recent years."
    Mrs Ribar argued change had been triggered by much tougher laws in Europe and the US, and a greater emphasis on ethics among freight companies.
    She pointed out that the latest EU fines reflected past problems that had taken years to investigate fully. "The EU Commission has taken five years to get somewhere. The whole story happened between 2000 and 2005. Our company has changed dramatically in the meantime."
    Panalpina, which ranks itself fourth behind DHL, Kuehne & Nagel and Schenker, has had various brushes with regulators. In addition to the latest European crackdown, the group has previously paid almost $82 million in a deferred prosecution agreement under the US Foreign Corrupt Practices Act, after probes into its Nigerian activities prompted it to pull out of the country.
    Panalpina has also lost business from government departments and big companies whose policies forbid them from trading with partners sanctioned for anti-competitive or corrupt practices.
    "Now as a chief executive in freight you deal more and more with lawyers than with your core business", said Mrs Ribar. Among the changes she has instituted in the company include elevating compliance, with the appointment of a chief compliance officer reporting directly to the CEO, creating much bigger local compliance teams and increasing focus on corporate ethics.
    "Companies have learned to deal much more sensibly with the situation," Mrs Ribar said. "At Panalpina, we haven't left a single stone unturned in re-examining the way we do business."

(Source:shippingazette)