Former Dhl Chairman Stresses Dangers of UPS Dominance Over U.S. Market

Turning the tables on competitor United Parcel Service (UPS), former chairman and chief executive officer of DHL Worldwide Express Patrick Lupo today expressed serious concern about UPS’s dominant position in the U.S. ground delivery market and its impact on the global parcel/express delivery market.
Speaking at the 10th Annual Aviation Symposium, a global forum of aviation executives and experts held annually in Phoenix, Lupo cited a recent U.S. Department of Transportation order indicating that UPS has 53% of the domestic U.S. parcel/express delivery market and almost 80% of the domestic U.S. ground delivery market, far outpacing its competitors. In a lively exchange with representatives of UPS and Federal Express, Lupo called the DOT decision “striking evidence that UPS has a monopoly position in the world’s largest economy.”
DOT’s ruling issued last Friday dismissed a petition brought earlier this year
by UPS that sought to revoke DHL’s license to conduct foreign air freight
forwarding in the United States. DOT found that DHL’s continued presence in
the market was “in the public interest,” noting that “UPS has presented no
evidence to support its allegation that DHLWE’s relationship with Deutsche Post is distorting competition.” Indeed, the decision held, “the evidence of record … shows that DHLWE’s share of the domestic parcel and express market is about one half of one percent, and that UPS’s share of the market is roughly one hundred times greater than DHLWE’s.”
Citing the DOT order, Lupo noted that, “such extraordinary concentration poses considerable dangers to the shipping public.” Lupo cited repeated price increases by UPS and operating margins of 16% in the U.S. ground business— more than double the industry average—that threaten to take their toll on the U.S. economy.
Lupo pointed out that the profits earned by UPS on its domestic ground monopoly have “supported UPS’s money-losing activities abroad.” DHL’s commercial response to UPS’s attempt to leverage its dominant U.S. position internationally, Lupo stated, has been to “up service quality and offer new services to our customers.
That is what competition is all about.”
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SOURCE DHL Worldwide Express CONTACT: Christopher Colford of Hill &
Knowlton,
202-944-5105, for DHL Worldwide Express
PR NEWSWIRE, 16th May 2001