UPS Joins FedEx in Attack on DHL, Deutsche Post

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United Parcel Service of America Inc. has joined FedEx Corp. in a renewed attack on Deutsche Post AG and plans to fight U.S. regulatory approvals sought by DHL Airways, UPS said yesterday.

The U.S. companies are calling for a probe of the airline's ownership structure and relationship with the German delivery giant.

UPS' move had been expected ever since Memphis-based FedEx claimed earlier this month that there is no evidence DHL is abiding by U.S. ownership laws.

In a filing with the U.S. Department of Transportation, UPS claimed that "non-U.S. citizens may have so much authority over DHL that it renders DHL controlled by non-U.S. citizens," putting the airline in violation of federal laws prohibiting foreign control or ownership of more than 25 percent of a U.S. carrier.

Atlanta-based UPS called for a public hearing into DHL's ownership structure.

In its own filing on Wednesday, DHL criticized FedEx's latest push as "patently anti-competitive and not supported by the statute, principles of due process or the public interest."

DHL added that it plans to respond separately to this week's UPS filing.

Deutsche Post, the German post office, last year took a controlling stake in Brussels-based DHL International Ltd., the largest delivery company outside the United States. DHL has a newly formed U.S. holding company that owns a 25 percent voting stake in DHL Airways and all of a new ground-based delivery operation.

In May, the Department of Transportation rejected efforts by FedEx and UPS to deny DHL Worldwide Express the right to fly U.S. routes. FedEx and UPS had argued that DHL should not be eligible to fly between U.S. cities because it is foreign-owned. Deutsche Post owns 51 percent of DHL.

Transportation officials said there was no evidence to act against DHL.

Separately, the European Commission said earlier this week that it had fined German Deutsche Post AG a "symbolic" 1,000 euros for abusing its dominant market position and undercutting rivals in the German parcels market.

The commission ruling brings to a close its second inquiry into abuse of its dominant position by the partially privatized Deutsche Post.

A third -- and potentially more significant -- investigation involving state aid to the company continues.


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