Bangladesh readies new air cargo facilities after ban by India
After India cancelled the use of its transhipment facilities for Bangladesh cargo, the government decided ...
© Marian Vejcik
By Alex Lennane
Airline executives are up in arms following the news that Lufthansa Cargo paid an undisclosed settlement to DB Schenker over an air cargo cartel.
It was shippers, not forwarders, that ultimately overpaid for freight carriage – so any compensation should be rightly theirs, claim air cargo executives.
“This is as unjust to our industry as it gets,” said one key airline executive. “The forwarders cannot be allowed to get away with this.”
“I am surprised shipper associations have not picked this up and ...
Comment on this article
Stephen
October 04, 2019 at 11:05 pmI don’t really buy this line of reasoning.
To begin with, no one who thinks forwarders are simple intermediaries between shippers and airlines understands the business model very well. If this attitude is widespread among “executives” at airlines, we have probably found a partial explanation for their failures to effectively play in the space.
By this logic, Walmart has an obsolete business model, because why wouldn’t I just buy my chips directly from Frito-Lay? As if the very concept of wholesaling is suddenly irrelevant. Silliness.
Secondly, DB Schenker was the aggrieved party in the lawsuit, not the shippers. Of course they should benefit from the proceeds of the settlement. The airlines engaged in anti-competitive practices in order to artificially inflate the value of their services above market rates. Their customer sued and was compensated.
In keeping with our analogy, if Frito-Lay overcharges Wal-Mart by colluding with other chip makers, Wal-Mart will collect a settlement. Wal-Mart has no obligation to then sub-divide the funds and pay out claims to individual consumers who may have paid more for a bag of chips than they should have under fair market conditions. A consumer buying chips from Wal-Mart is a customer of Wal-Mart, not a customer of Frito-Lay.
Extrapolating this argument to its logical conclusion sends us down a spiral of absurdity.