Fedex, UPS use war bill to fight DHL expansion in US

United Parcel Service Inc. and FedEx Corp. have managed to disrupt plans by rival Deutsche Post AG, which owns DHL Worldwide Express, to expand in the U.S. by using a must-pass war-funding bill. Last week, the Senate voted to include an amendment intended to force regulators to be stricter in enforcing U.S.-ownership regulations for air-cargo carriers against the German company. Alaska Republican Ted Stevens, Chairman of the Senate Appropriations Committee, inserted the provision, following a request by Montana Republican Roy Blunt, House Majority Whip.

Abstracted from: The Wall St Journal

AFX UK FOCUS 7th April 2003
FEDEX, UPS TRY TO STALL DHL EXPANSION PLANS THROUGH SENATE AMENDMENT – REPORT

LONDON (AFX) – Federal Express Corp and United Parcel Service Inc have managed to win a Senate amendment that pressures regulators to toughen US-ownership rules for air cargo carriers doing business for the military, the Wall Street Journal reported.

The move could stall Deutsche Post AG’s plans for expansion in the US through its unit DHL Worldwide Express.

The provision was inserted into legislation for some 80 bln usd in funding for the war in Iraq by Senate Appropriations Committee chairman Ted Stevens – a Republican from Alaska – at the urging of House Majority Whip Roy Blunt – a Missouri Republican.

FedEx and UPS hope to at least stall Deutsche Post’s plan — announced last month — to acquire the ground-delivery operations of Seattle’s Airborne Inc, the report said.

UPS is a client of Roy Blunt’s lobbyist son Andrew Blunt, in Missouri, the paper said.

The Senate amendment defined a new standard for carrying military cargo, requiring that an air carrier be “effectively controlled by citizens of the United States,” the Journal said.

This was watered down from an original version which aimed to disqualify any company that receives 50 pct or more of its operating revenue from a foreign entity, which either owns a voting interest in the carrier or is owned itself by an “agency or instrumentality of a foreign state.”

FedEx and UPS denied any attempt to play on the anti-German feelings in Congress. But as part of the same Iraq war bill, the House adopted an amendment last week seeking to bar German, French and Russian companies from any postwar reconstruction contracts financed by the US, the Journal said.

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