Tuesday, August 12, 2008

House Committee To Hold Hearings on UPS-DHL Deal

The chairman of the House Judiciary Committee announced Friday that he plans to hold hearings in September to review an agreement between United Parcel Service Inc. and DHL Express that makes UPS the exclusive provider of air shipping for DHL's North American package delivery service.

The hearing also will focus generally on competition in the air shipping industry.

UPS and DHL announced their deal, a 10-year agreement, in May.

"A number of concerns have been raised regarding consolidation in the air freight business in general and the proposed consolidation involving DHL in particular, including the impact on jobs in the affected communities," Rep. John Conyers, D-Mich., the committee's chairman, said in announcing the hearing.

Conyers' announcement comes the same week that two senators called on federal antitrust regulators to take a close look at the deal.

On Monday, Sens. Herb Kohl, D-Wis., and Orrin Hatch, R-Utah, made their request in a letter to officials at the Juctice Department and the Federal Trade Commission.

The senators said the deal raised questions about DHL's ability to compete against UPS, and they said the agreement would have a "devastating financial impact" on DHL's current air transport providers, ABX Air and ASTAR.

UPS and DHL are the second- and third-largest overnight delivery services in the U.S., behind Fedex Corp.

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