DHL failed. Return of Airborne ILN only option?

[fob727]

BBB, I'm overjoyed that something other than the demise of over 1,000 of your fellow aviators(if you are even a pilot) and 9000 others puts a smile on your face. You can post your BS about "entitlement" here and on other boards, use your "extensive vocabulary", but it doesn't change the fact that you are an A$$hole!

 

[Publishers]

Three are some keys to any anti trust action:

• prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
• banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.
• supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.

The substance and practice of competition law vary from jurisdiction to jurisdiction. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatisation of state owned assets and the establishment of independent sector regulators

1. Did the action lead to there being less competitiors in the market?
2. Is the public hurt by this action?
3. This is not a joint venture or a merger.

In fact, it could easily be argued that not allowing this would decrease the competition if DHL left. Secondly, they could leave and hire UPS or someone else to do the international deliveryl, even someone like American. The only question then would be are they going to have their own p&d. There is no law that can compel them to continue.

 

[fob727]

DHL will never leave the US on it's own. Too much of its Int'l business is here.

 

[shooter]

Three are some keys to any anti trust action:

• prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
• banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.
• supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.

The substance and practice of competition law vary from jurisdiction to jurisdiction. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatisation of state owned assets and the establishment of independent sector regulators

1. Did the action lead to there being less competitiors in the market?
2. Is the public hurt by this action?
3. This is not a joint venture or a merger.

In fact, it could easily be argued that not allowing this would decrease the competition if DHL left. Secondly, they could leave and hire UPS or someone else to do the international deliveryl, even someone like American. The only question then would be are they going to have their own p&d. There is no law that can compel them to continue.

Aahhh, a Wikihead. Lets see what Wiki says about our Sherman Act.

The Sherman Antitrust Act (Sherman Act[1], July 2, 1890, ch. 647, 26 Stat. 209, 15 U.S.C. § 1–7) was the first United States Federal statute to limit cartels and monopolies. It falls under antitrust law.
The Act provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal".

The purpose of the act was to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels.

The way I see it, if you combine the air service of two competitors under only one of the air networks you have eliminated competition for that service. So, yes to question number 1, there are less competitors in the market. And as a result for question number 2, air network service and schedule will be dictated by UPS and that not only eliminates consumer choice but their price as well. And for question number 3, a rose by any other name....... Call it what you want and it does not change what it really is.

If DHL pulls out of the market is not an argument you can make. The act also states "The Sherman Act was not specifically intended to prevent the dominance of an industry by a specific company. any company that "got the whole business because nobody could do it as well as he could" would not be in violation of the act. The law attempts to prevent the artificial raising of prices by restriction of trade or supply. [8] In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not."

So UPS can freely dominate the market with FedEx and that is fine. If DHL concedes it cannot compete against UPS and FedEx then you two have legal right to the entire market.

You guys over at UPS have a good product. I like it and prefer to use it rather than FedEx. If you kill off DHL due to your own service and product, good for you.

Again, I am not a lawyer (thank god). But the more I look and listen to people better versed in this law I can see how there is a strong case to stop this deal. And being an Airborne Express guy that has seen my future destroyed by DHL, I welcome the resistance.

 

[Big Beer Belly]

The way I see it, if you combine the air service of two competitors under only one of the air networks you have eliminated competition for that service. So, yes to question number 1, there are less competitors in the market. And as a result for question number 2, air network service and schedule will be dictated by UPS and that not only eliminates consumer choice but their price as well. And for question number 3, a rose by any other name....... Call it what you want and it does not change what it really is.

Shooter...

Any anti-trust review will look at DHL today and after the switch of vendors. A switch in vendors will have zero impact on a consumer's choice in shipping services. 2 years from now they'll still be able to ship a package using DHL. There will be zero loss of competition in the marketplace; there is no anti-trust case.

Furthermore, since this is not a merger and no loss of competition in the marketplace will result, UPS and DHL intend to argue the DOJ does not even have jurisdiction (over vendor choices.)

BBB

 

[shooter]

Shooter...

Any anti-trust review will look at DHL today and after the switch of vendors. A switch in vendors will have zero impact on a consumer's choice in shipping services. 2 years from now they'll still be able to ship a package using DHL. There will be zero loss of competition in the marketplace; there is no anti-trust case.

Furthermore, since this is not a merger and no loss of competition in the marketplace will result, UPS and DHL intend to argue the DOJ does not even have jurisdiction (over vendor choices.)

BBB

I would respectfully disagree based on how I read the anti-trust laws. On the surface you may see yellow and brown boxes, but the pricing and service locations and times for air service are dictated by one sole carrier in this scenario and that is where I see the anti-competitive problems. But you may be right, we shall see.

 

[Publishers]

In addition to the above, you are also forgetting USPS product and other shipping products that exist that are competitive.
For anti trust to be in effect, DHL would have to be the complaintant saying they were forced out by UPS/FEDEX who have a cartel/monopoly on the market. Not the case here. Shooter and Big have it right.

 

[shooter]

In addition to the above, you are also forgetting USPS product and other shipping products that exist that are competitive.
For anti trust to be in effect, DHL would have to be the complaintant saying they were forced out by UPS/FEDEX who have a cartel/monopoly on the market. Not the case here. Shooter and Big have it right.

I do not agree with BBB, Publishers.

I understand that your argument says there are choices to use DHL, UPS, FedEx and USPS and you would be right. But pick any of the four shippers and you have only two ways to ship the express product after the deal and that would be UPS or FedEx. I do not understand how that is hard to see as a problem for consumers for some on this board. Or how they can't tell me why they do not see it as a problem. Even if I were not directly affected I am sure I would see the anti-competitive problems that creates.

EDIT: And for DHL to be driven out of business due to a superior product by UPS or FedEx would be the way for it to not be an anti-trust problem. Free market that results in one or two competitors is fine and legal. The collusion of two players to reduce the market or raise prices are against anti-trust laws and illegal. That is what I think is going on here.

 

[Big Beer Belly]

I

I understand that your argument says there are choices to use DHL, UPS, FedEx and USPS and you would be right. But pick any of the four shippers and you have only two ways to ship the express product after the deal and that would be UPS or FedEx.

Shooter...

I (we) see your point. I simply don't think it's a big deal based upon other industries and their similar reliance on "shared infrastructure".

My info about the telecom industry is (admittedly) dated, but I'm certain there are other industries (unknown to me) with similar large infrastructure arrangements. 10-20 years ago there were over 200 separate companies selling phone service in the US. AT&T dominated the copper wire infrastructure but sold access to their infrastructure to other "competing" telecom providers, who in turn re-sold it to businesses and consumers (similar to DHL selling their delivery service but utilizing the UPS network.) AT&T and Sprint would routinely "share" access to each others' networks in agreed upon locations to economize on building duplicating infrastructures (mostly fiber optic) in locations with light traffic and/or remote locations.

The point is that although the consumer had several hundred choices in telecom providers all the bandwidth was owned by just a few. You would argue this was clearly a problem and I would retort that it wasn't (with the correct oversight.)

I understand the shipping, transportation, electrical power generation/distribution industries are all big infrastructure sharing industries also.

BBB

 

[shooter]

Shooter...

I (we) see your point. I simply don't think it's a big deal based upon other industries and their similar reliance on "shared infrastructure".

My info about the telecom industry is (admittedly) dated, but I'm certain there are other industries (unknown to me) with similar large infrastructure arrangements. 10-20 years ago there were over 200 separate companies selling phone service in the US. AT&T dominated the copper wire infrastructure but sold access to their infrastructure to other "competing" telecom providers, who in turn re-sold it to businesses and consumers (similar to DHL selling their delivery service but utilizing the UPS network.) AT&T and Sprint would routinely "share" access to each others' networks in agreed upon locations to economize on building duplicating infrastructures (mostly fiber optic) in locations with light traffic and/or remote locations.

The point is that although the consumer had several hundred choices in telecom providers all the bandwidth was owned by just a few. You would argue this was clearly a problem and I would retort that it wasn't (with the correct oversight.)

I understand the shipping, transportation, electrical power generation/distribution industries are all big infrastructure sharing industries also.

BBB

Well I hope that does not happen in this case. Not for just the obvious reasons you hear me voice, but with a situation like this (in comparison to your example) and if allowed to go through just may tie your hands as a labor group. If you find yourself at heads with management and that "oversight" does not allow you to exercise your rights as labor you may be...well...for a lack of a better word, trapped. The concerns in this deal for consumers would be the same that removes your best weapon as a labor group. This could get MUCH more deeper on the Hill than what I was just thinking.

Any word on your end as to the signing of the contract? The DOJ will not even start an investigation (if they do) until something is on paper.

 

[Big Beer Belly]

Well I hope that does not happen in this case. Not for just the obvious reasons you hear me voice, but with a situation like this (in comparison to your example) and if allowed to go through just may tie your hands as a labor group. If you find yourself at heads with management and that "oversight" does not allow you to exercise your rights as labor you may be...well...for a lack of a better word, trapped. The concerns in this deal for consumers would be the same that removes your best weapon as a labor group. This could get MUCH more deeper on the Hill than what I was just thinking.

Any word on your end as to the signing of the contract? The DOJ will not even start an investigation (if they do) until something is on paper.

The "labor friendly" Clinton administration (DEMOCRAT) told the IPA we would never be released into self-help a few contracts ago... for what it's worth. Actually getting to the point of self-help is a VERY long and arduous journey and has been for years. It's a terribly political animal. So, my opinion is that it potentially changes very little for labor. The RLA has always been heavily stacked in the company's favor.

As for the latest... just what I read... copied below from yesterday:

>> DHL’s Chief has told presidential candidate John McCain that the planned deal between DHL and UPS is “irreversible.”
CEO Frank Appel wrote in a letter to McCain that DHL “has already committed” or set aside about $300 million toward planned severance, retention and health benefits for the workforce in Wilmington and other U.S. locations. Appel said that includes Wilmington-based employees of ABX Air, ASTAR Air Cargo as well as DHL.
Appel tells McCain the DHL-UPS proposal on the table is by its nature “a pure commercial outsourcing contract for services between two separate companies, limited to DHL’s airlift in America, and would not diminish the competitive situation between DHL and UPS in the U.S. in any way.”
There is no alternative to “this drastic measure” due to current annual U.S. losses of $1.3 billion, writes Appel. “This leaves me no other choice than to proceed as planned, also considering my overall responsibility as chief executive officer of a global company and to safeguard as many jobs as possible in the U.S.,” he says.
DHL Americas Director of Corporate Communications Jonathan Baker said Monday the timeline for finalizing a contract with UPS is within “the coming weeks.”
The negotiations, said Baker, are progressing, and the two companies now are talking about details.
A signed contract will not necessarily be reached by the end of August, said Baker. In the May 28 announcement of the planned deal between DHL and UPS, the timeframe for reaching a contractual agreement was said to be within three months.
http://tinyurl.com/65vn4h<<

BBB

 

[shooter]

The "labor friendly" Clinton administration (DEMOCRAT) told the IPA we would never be released into self-help a few contracts ago... for what it's worth. Actually getting to the point of self-help is a VERY long and arduous journey and has been for years. It's a terribly political animal. So, my opinion is that it potentially changes very little for labor. The RLA has always been heavily stacked in the company's favor.

As for the latest... just what I read... copied below from yesterday:

>> DHL’s Chief has told presidential candidate John McCain that the planned deal between DHL and UPS is “irreversible.”
CEO Frank Appel wrote in a letter to McCain that DHL “has already committed” or set aside about $300 million toward planned severance, retention and health benefits for the workforce in Wilmington and other U.S. locations. Appel said that includes Wilmington-based employees of ABX Air, ASTAR Air Cargo as well as DHL.
Appel tells McCain the DHL-UPS proposal on the table is by its nature “a pure commercial outsourcing contract for services between two separate companies, limited to DHL’s airlift in America, and would not diminish the competitive situation between DHL and UPS in the U.S. in any way.”
There is no alternative to “this drastic measure” due to current annual U.S. losses of $1.3 billion, writes Appel. “This leaves me no other choice than to proceed as planned, also considering my overall responsibility as chief executive officer of a global company and to safeguard as many jobs as possible in the U.S.,” he says.
DHL Americas Director of Corporate Communications Jonathan Baker said Monday the timeline for finalizing a contract with UPS is within “the coming weeks.”
The negotiations, said Baker, are progressing, and the two companies now are talking about details.
A signed contract will not necessarily be reached by the end of August, said Baker. In the May 28 announcement of the planned deal between DHL and UPS, the timeframe for reaching a contractual agreement was said to be within three months.
http://tinyurl.com/65vn4h<<

BBB

Well, if I get by Monday the 25th I figure I am good until the end of DEC. UPS is not dumb like DHL has proven themselves to be and will not mess their 4th quarter. So once its over my gut tells me UPS will be getting it all in the first part of the year. Lets see how fast things move (or if they stop) after the signed contract.

 

[MACHTRANSDUCER]

Well, if I get by Monday the 25th I figure I am good until the end of DEC. UPS is not dumb like DHL has proven themselves to be and will not mess their 4th quarter. So once its over my gut tells me UPS will be getting it all in the first part of the year. Lets see how fast things move (or if they stop) after the signed contract.

Wait! I thought they would have this INKED within 90 days? You mean to tell me DHL is "not on time"? Thats odd? Another note, so is DHL kicking in an additional $30k per worker based on 10k workers and 300 million? or was that already included in our "weeks of service severance letter"?

 

[Big Beer Belly]

So once its over my gut tells me UPS will be getting it all in the first part of the year. Lets see how fast things move (or if they stop) after the signed contract.

From what I've been reading the volume will take the better part of '09 to be transferred. Expect DHL to dangle monetary carrots to those workers willing to stay to the last day.

Again Shooter... sorry for your situation. In life, sometimes we're the pigeon and (unfortunately) sometimes we're the statue.


BBB

 

[shooter]

From what I've been reading the volume will take the better part of '09 to be transferred. Expect DHL to dangle monetary carrots to those workers willing to stay to the last day.

Again Shooter... sorry for your situation. In life, sometimes we're the pigeon and (unfortunately) sometimes we're the statue.


BBB

Thanks. This industry has left me being the statue too many times. :erm: This time will be my last. Who knows whats next, but it sure will not be aviation.

EDIT: My wife is convinced it is the best thing for me. As long as I keep my wants in focus and will not be forced to "settle" for something to pay the bills I think she is right. I want days with weekends and holidays off. Aviation has sucked countless family time away from me over the years.

 

[DC8CRIVER]

For those of you that take Appel at his word, his plans to have a deal inked by the end of August are now out the door. It's going to be VERY difficult for DHL & UPS to come to terms. It would be best to NOT believe much, if any, of the propaganda that you hear from DP and DHL corporate.

First, DHL has hidden profits and losses for years. They were hit with a $500 Million fine in the mid 90's for tax evasion. To say they are losing $1 billion in the US is very likely a numbers game to drive the US costs up and justify the merger between DHL & UPS.

Furthermore, there are MANY alternatives to the proposed merger, they just are not willing to look for them. One alternative would be to abandon ILN and move back to CVG where they still own a brand new $315 million sort facility (and move the ILN jobs down with the planes). Another would be to shut down the DHL US HQ in Plantation and move it to a more cost effective location (near sort operations for example).

The most obvious way to stem losses would be to refleet one or both airlines. DHL has refleeted airlines in Hong Kong, England, and Europe. Why not the US? The cost of the transfer of flying has been stated as $2 billion - just to transfer flying - in addition to the $1 billion to pay UPS to fly the stuff.

You know, a billion here, a billion there... you add all that up and you're starting to talk about some REAL money.

As far as the anti trust let's say, hypothetically, that Fedex wanted to cut costs and subbed out all Fedex flying to UPS (stop salivating, brown suits). Is there anyone that thinks that UPS would NOT have total control of the express shipping business if all Fedex did was pick up purple boxes and give them to UPS?

C'mon. Get real. It would be a merger if it were Fedex and UPS - so it has got to be a merger between UPS and DHL. It's illegal - and just because their lawyers say it isn't so doesn't make it right.

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[PreContact]

Furthermore, there are MANY alternatives to the proposed merger, they just are not willing to look for them. One alternative would be to abandon ILN and move back to CVG where they still own a brand new $315 million sort facility (and move the ILN jobs down with the planes). Another would be to shut down the DHL US HQ in Plantation and move it to a more cost effective location (near sort operations for example).

How is this more efficient than what's been proposed with UPS? Do you think all your workers would just pack up and move to Cincinnati? And how much money can moving a corporate HQ save? I just don't see it...

 

[shooter]

When you sit back and look at this whole mess, forget that we are about to lose our jobs, forget about the Congressional hearings coming up, forget about the few that are sporting wood over the soon to be unemployed, forget about the conspiracy theory's and suspected collusion.......just sit back and look at what Deutsche Post has done since they bought DHL and Airborne Express. Forget that you work for them for just one minute......


Now look at all the decisions they have made on how to run a business and tell me you don't get a big 'ol belly laugh at the darn fools. Like an Inspector Clouseau running a business.

 

[DC8CRIVER]

Shooter,

You are correct; It would be really funny if it weren't so pathetic and tragic. Sad that so few make such bad decisions that ruin so many lives.

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[DC8CRIVER]

How is this more efficient than what's been proposed with UPS? Do you think all your workers would just pack up and move to Cincinnati? And how much money can moving a corporate HQ save? I just don't see it...

DHL owns the entire airport in Wilmington, Ohio. Some of the cost savings would be from the elimination of all the costs of owning and running your own airport. Not only does DHL pay ABX to repair the runways, mow the grass, plow the snow, and change the light bulbs in the taxiways, they also pay to maintain the ILS's, staff the tower, staff the fire house, provide security, maintain parking lots, administer the airfield operations, etc, etc. On top of those expenses, DHL pays ABX a 1.75% over ride as the contractor that operates the airfield. At CVG, obviously the government pays all of those costs.

DHL paid $6 or $7 million a year in CVG as landing fees. $6 or $7 million is a fraction of what DHL pays to run ILN.

As far as the workers moving, a quick of your Google Earth shows that the two airfields are 52 miles apart. Many of the CVG workers never had to move when ILN ops began due to the close proximity of the two facilities and I suspect (especially with the Wilmington housing market headed down the toilet) that many workers would simply reverse that and commute to CVG.

The sort facility at CVG would require no expansion as the volume that we currently carry in ILN is below the max capacity of the abandoned CVG sort.

Some of the savings from a Plantation HQ closure are being realized as we speak. The Plantation workforce has been slashed and there is an obscene amount of vacant office space at the DHL HQ down there. DHL administration was very top heavy and expensive.

By shifting the flying, they are tripping over dollars to pick up dimes (don't most airlines do this?). The reason DHL is losing money in the US (if they really are at all) is NOT due to the airlines that do their flying. This is simply a brazen move to create a de facto merger when they both realize that a literal merger would be illegal.

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