FedEx Corp. has received a grand jury subpoena as part of a probe by the U.S. government intopossible criminal violations of antitrust laws in the air cargo transportation industry. The
integrator said it does not believe it is a target of the investigation, which it said was beingconducted by the antitrust division of the U.S. Department of Justice, and is cooperating with theinvestigators.FedEx disclosed the subpoena in a Form 10-K filed with the U.S. Securities and ExchangeCommission. FedEx’s rival United Parcel Service has already said it was contacted by U.S.authorities about the investigation, but said it does not believe it is a target of theinvestigation and will cooperate with the Justice Department.
The investigation appears to be part of a global probe of airlines suspected of fixing cargoprices that began in February, when the European Union’s executive arm and the U.S. JusticeDepartment raided a number of airlines on both sides of the Atlantic. Other carriers have beenasked for information. According to Justice department sources, the other airlines drawn into thewidening investigation include Air France-KLM, British Airways, Deutsche Lufthansa, Scandinavianairline SAS, Cargolux and Air Canada’s parent ACE Aviation Holdings Inc.
At issue are the surcharges that airlines have imposed for fuel; added security since theSeptember 11, 2001, hijackings in the United States; and higher war risk insurance, according tosome of the carriers being questioned. Fuel costs for airlines rose to nearly $100 billion lastyear from $44 billion in 2003, according to the International Air Transport Association (IATA),prompting many airlines to impose surcharges on fares. Insurance industry sources said the cost ofwar risk insurance on cargo was a fraction of that covering passenger operations, and tiny relativeto fuel costs.
