Senators: Government should block UPS-DHL deal
The Justice Department should block a proposed deal between package delivery companies UPS Inc. and DHL Express because it would violate antitrust laws and eliminate thousands of jobs, a pair of Democratic senators said Thursday.
UPS would provide air transport services for DHL’s North American business for 10 years under a contract the two companies are developing, UPS said in May. Currently, two independent airlines provide the services.
The contract, expected to be completed later this year, could result in USD 1 billion of additional annual revenue for UPS. Other terms of the deal haven’t been disclosed.
But the arrangement also could lead to the closure of a DHL air freight and sorting facility in Wilmington, Ohio, and eliminate 9,000 jobs, the senators’ letter said.
The deal “will substantially diminish, if not eliminate, the competition between DHL and UPS by rendering DHL a captive of UPS rather than an independent competitor,” Sens. Herb Kohl, D-Wis., and Sherrod Brown, D-Ohio, said in the letter. Kohl chairs a Senate antitrust subcommittee.
Norman Black, a spokesman for UPS, said the agreement is a “straight vendor contract” and not subject to antitrust oversight.
Ohio state officials have urged DHL to find other alternatives, but a DHL executive said earlier this month the company is struggling and losing USD 5 million a day. DHL is a unit of German postal service Deutsche Post AG.
The Justice Department should block a proposed deal between package delivery companies UPS Inc. and DHL Express because it would violate antitrust laws and eliminate thousands of jobs, a pair of Democratic senators said Thursday.
UPS would provide air transport services for DHL’s North American business for 10 years under a contract the two companies are developing, UPS said in May. Currently, two independent airlines provide the services.
The contract, expected to be completed later this year, could result in USD 1 billion of additional annual revenue for UPS. Other terms of the deal haven’t been disclosed.
But the arrangement also could lead to the closure of a DHL air freight and sorting facility in Wilmington, Ohio, and eliminate 9,000 jobs, the senators’ letter said.
The deal “will substantially diminish, if not eliminate, the competition between DHL and UPS by rendering DHL a captive of UPS rather than an independent competitor,” Sens. Herb Kohl, D-Wis., and Sherrod Brown, D-Ohio, said in the letter. Kohl chairs a Senate antitrust subcommittee.
Norman Black, a spokesman for UPS, said the agreement is a “straight vendor contract” and not subject to antitrust oversight.
“We view this is a business development opportunity,” he said, that could add to the 358,000 jobs UPS has in the United States.
Ohio state officials have urged DHL to find other alternatives, but a DHL executive said earlier this month the company is struggling and losing $5 million a day. DHL is a unit of German postal service Deutsche Post AG.
FedEx has 43 percent of the overnight package delivery market, the senators’ letter said, followed by UPS with 32 percent and DHL with 8.5 percent.
