FedEx, UPS Reportedly Use War Bill to Fight DHL Expansion

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FedEx and United Parcel Service have turned to Congress in efforts to stop DHL Worldwide Express' planned acquisition of Airborne Inc.'s ground delivery business, the Wall Street Journal reported yesterday.


The two companies pushed a Senate amendment stating that any company receiving 50 percent or more of its operating revenue from a foreign entity cannot carry military cargo, according to the report.


The amendment, introduced without debate by Senate Appropriations Committee chairman Ted Stevens, R-AK, at the urging of House Majority Whip Roy Blunt, R-MO, was added to a bill that would authorize nearly $80 billion to fund the war with Iraq.


If DHL Worldwide's acquisition of Airborne's ground delivery operation went through, Airborne's air business would become an independent public company called ABX Air Inc. The $1.05 billion deal, which would strengthen Deutsche Post's presence in the U.S. package delivery business, is to close this summer.


FedEx and UPS filed separate proposals with the U.S. Department of Transportation following the announcement charging that the deal may violate U.S. limits on foreign control of domestic airlines. They charge that DHL Worldwide effectively would control Airborne's air operations despite plans to spin it off into a publicly traded company. U.S. law restricts foreign ownership of U.S. airlines to no more than 25 percent.


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