ABX Air & DHL agree to arbitration
ABX Air, Inc said that it and DHL have agreed to arbitrate a dispute concerning allocation of certain overhead expenses, and that DHL has paid ABX Air USD 8.8 million in budgeted expense reimbursements previously withheld.
Since the USD 8.8 million payments were withheld on November 5, 2007, ABX Air said that DHL has continued to reimburse it in full for budgeted expenses.
Joe Hete, president and CEO of ABX Air, said, “We welcome this action by DHL, along with their recent acknowledgement of the high-quality ACMI and sorting services we continue to provide to them as their principal U.S. service provider. It is a positive step, one that demonstrates that our mutual interest in DHL’s success can be achieved only by working more closely together. We also appreciate that DHL has affirmed it will continue our relationship through the current terms of our commercial agreements, and its willingness to discuss a broad range of topics that could further benefit that relationship.”
As further described in ABX Air’s Form 8-K filed with the Securities and Exchange Commission on November 9, 2007, DHL is in default under terms of the ACMI and Hub Services agreements. The default resulted from an USD 8.8 million reduction in DHL’s weekly pre-funding payment to ABX Air on November 5, 2007, for ABX Air’s expenses related to the ACMI and Hub Services agreements. DHL cited as the reason for the reduction its contention that it was no longer responsible to reimburse ABX Air for certain overhead expenses. ABX Air notified DHL that it was in default under the commercial agreements because the agreements do not permit the withholding of amounts in dispute. ABX Air said that DHL remains in default under the ACMI and Hub Services agreements. DHL maintains that it has not defaulted and that its actions were proper.
