Senators Seek DHL-UPS Probe

Two U.S. senators are calling for a federal antitrust investigation into DHL's plans to contract with competitor UPS as part of the DHL move to scale back operations in the United States.

Sens. Herb Kohl, D-Wis., and Orrin Hatch, R-Utah, wrote to the U.S. Department of Justice and the Federal Trade Commission, saying the "proposed agreement raises important antitrust and competition issues."

Kohl is chairman of the Subcommittee on Antitrust, Competition Policy, and Consumer Rights of the Senate Judiciary Committee and Hatch is the ranking Republican on the panel.

They wrote in their letter to the agencies that the deal would make DHL "reliant for air transportation on one of its two major competitors. This raises the question if DHL will still be able to effectively compete against UPS."

DHL parent Deutsche Post World Net announced in May it would scale back its operations in the United States and switch its air parcel transport from two dedicated carriers, ABX Air and ASTAR Air Cargo, over to UPS. The carriers project UPS will get about $1 billion in the agreement.

"We are still in negotiations with DHL and believe it is premature to discuss hearings as the details of the agreement have not been finalized," said Malcolm Berkley, a spokesman for UPS. "Should we reach an agreement with DHL, we expect to maintain a vendor/customer relationship, similar to the relationship UPS and others in the industry have with the USPS.

"We do not believe such agreements pose antitrust issues. UPS will continue to compete with DHL in the US and around the world," he said.