DHL failed. Return of Airborne ILN only option?

[shooter]

The only real, albeit remote, possibility would be for some very large group of private equity investors to buy back the operations and try to reconstitute the old Airborne Express in some fashion, but the financial and market realities of that idea are very forbidding.

August 18, 2008 - [FONT=verdana][SIZE=2][B][SIZE=3][/SIZE][/B][/SIZE][/FONT]
[FONT=verdana][SIZE=2][B][SIZE=3][/SIZE][/B][/SIZE][/FONT]
[FONT=verdana][SIZE=2][B][SIZE=3]Transportation News: As Politicians Turn Up the Heat on Planned DHL Hub Closing, Deutsche Post CEO Says There Were Simply No Other Options[/SIZE][/B][/SIZE][/FONT]


[SIZE=1][FONT=verdana][SIZE=2][B]Losing $5 Million a Day Can’t Go On Forever; State of Ohio Offers Vague Partnership Possibility to Save Wilmington Hub[/B][/SIZE][/FONT]

[B]SCDigest Editorial Staff[/B]

[FONT=verdana][SIZE=2]The drama continues in DHL’s announced change in its North American strategy, which includes outsourcing its airlift operations to UPS and closure of its large sortation hub in Wilmington, OH. That operation employs more than 6000 workers directly and several thousand more that work in other companies that use or support the hub. The outsourcing to UPS would move the air operations of DHL from Ohio to UPS’ massive Louisville, KY hub. [/SIZE][/FONT]

[FONT=verdana][SIZE=2]Supported by politicians on both sides of the aisle and presidential candidate John McCain, the US Congress plans hearings in September on the proposed deal and how it might impact parcel shipping markets here. The stated concern revolves around the potential to reduce competition in the express shipping industry and other anti-trust concerns. However, DHL says it plans to sell and market its services in competition with UPS under the deal, dismissing charges it will reduce market competition. Regardless, it seems clear that the closure of the Wilmington hub and related job losses are the real drivers of political concern.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]“This deal, if allowed to be completed, would have consequences beyond its devastating impact on our local, state and national economy,” said [B]Mike Turner[/B], an Ohio congressman in Dayton whose district includes Wilmington.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]The planned hearings in fact come before DHL and UPS have even worked out a deal on the outsourcing relationship. At one point, DHL had said it hoped to have an agreement with UPS by the end of July, but now entering the third week of August, the deal has still not been completed. Some observers have questioned the strategy of announcing the outsourcing plans before the UPS deal was done, which may give UPS an advantage in the negotiations.[/SIZE][/FONT]

[FONT=verdana][SIZE=2][B]“Can’t Afford to Take $1.3 Billion Losses Forever”[/B][/SIZE][/FONT]

[FONT=verdana][SIZE=2]Meanwhile, [B]Frank Appel[/B], CEO of DHL parent Deutsche Post, finally commented about the DHL controversy, after having been largely silent until now. He defended the move to outsource to UPS (and other announced changes) as necessary to enable DHL to remain in the US market and save tens of thousands of other jobs there.[/SIZE][/FONT]
[FONT=verdana][SIZE=2]He also wonders what the US Congressional actions can really achieve – given that the alternative for DHL is to shut down its North American operations completely. Appel said the company was losing $5 million per day in North America.[/SIZE][/FONT]
[/SIZE]

“I can’t afford to take losses of $1.3 billion [annually] forever,” he stated.

[FONT=verdana][SIZE=2]According to a Wall Street Journal story, Appel said he has resisted calls for him to visit the Wilmington area, as he had nothing new he could tell the workers and community there.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]“Nevertheless, I think it’s important to tell the people that I understand that it’s a hardship for them,” Appel said.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]To further add to the drama, Ohio Lieutenant Governor [B]Lee Fisher[/B] said last week that the state was interested in potentially jumping in to save the Wilmington hub and jobs.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]Fisher said the state of Ohio might be willing to craft “a risk-sharing, collaborative financial partnership” with DHL to eliminate the need for it to outsource to UPS. Details of this idea, however, were very limited.[/SIZE][/FONT]
[FONT=verdana][SIZE=2]Finally, Ohio Senator [B]Sherrod Brown[/B] wrote a letter this week to the Bush administration asking it to consider what has happened with DHL as it negotiates with the Europe Union on the so-called Open Skies agreement that would ease restrictions on a variety of international air transportation operations. Stage II of the Open Skies agreement is currently under discussion.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]In the letter, Brown noted what DHL said when it received approval to acquire US-based Airborne Express in 2003: “DHL said the transaction would: 1) increase profitability and market share for both companies; and 2) enhance free market competition by creating a new entrant into an express delivery market dominated by two major carriers: UPS and FedEx.” Brown wrote, “Unfortunately, that has not been the experience of DHL in the US market.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2]Said SCDigest editor Dan Gilmore: “Unfortunately, no matter what management mistakes got the company into this position, nothing anyone does can change the fact that DHL is losing huge amounts of money in the US market. No law or ruling can force them to continue to do that indefinitely.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2]He added, “The only real, albeit remote, possibility would be for some very large group of private equity investors to buy back the operations and try to reconstitute the old Airborne Express in some fashion, but the financial and market realities of that idea are very forbidding.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2][B]Do you see any plan or action that would change DHL’s announced strategy changes in the [/B][B]US[/B][B]? Do you think something should be done – or should the market just play itself out? How important is it for the [/B][B]US[/B][B] market to have a third strong parcel competitor beyond UPS and FedEx? Let us know your thoughts at the Feedback button below.[/B][/SIZE][/FONT]

[URL]http://www.scdigest.com/assets/On_Target/08-08-18-1.php?cid=1860[/URL]

 

[EMBPILOT1]

Just proves this has absolutely nothing to do with anti-trust issues. This is about a community that is about to lose a lot of jobs. Unfortunately, there is nothing the congress or a team of lawyers can do to stop it.

 

[DC8CRIVER]

Just proves this has absolutely nothing to do with anti-trust issues. This is about a community that is about to lose a lot of jobs. Unfortunately, there is nothing the congress or a team of lawyers can do to stop it.

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

 

[brownie]

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

I can't believe you put our politician and legal experties in one sentence.:laugh: :laugh: :laugh: :laugh: :laugh: :laugh: :laugh: :laugh:

 

[EMBPILOT1]

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

Sorry man, but u r dreaming. I don't blame them for for the anti-trust argument, but go speak to a lawyer who doesn't work for the government and you will find the real answer. Wish you all the best of luck, but this ain't the road that will solve the problem.

 

[shooter]

Sorry man, but u r dreaming. I don't blame them for for the anti-trust argument, but go speak to a lawyer who doesn't work for the government and you will find the real answer. Wish you all the best of luck, but this ain't the road that will solve the problem.

Actually, I don't know any anti-trust lawyer that would not want to take this on. But if you listen to Appel an anti-trust case to stop the deal will drive DHL out of the States. I think that most people think that is just fine. So the editorial question remains, is the re-birth of Airborne Express the best hope for ILN?

Sure DHL staying in ILN would be the best. But DP says that they will leave the market if they cant get with UPS. So, we will push them to see if thats true. And if it is, then what?

Now keep in mind that the outcome is the same for these people if DHL uses UPS or DHL is out of the USA.

 

[Publishers]

The people that want to believe there is some anti trust case here are grasping at straws. If there had been a merger, maybe, but that is not the case here. You could not make it any clearer, the option is to shut down and leave the US.
It is equally clear that the concern is the Wilmigton jobs, not the air force jobs. Is there supposed to be some gratification if they force them out and you manage to kill the other jobs in the US?

 

[shooter]

The people that want to believe there is some anti trust case here are grasping at straws. If there had been a merger, maybe, but that is not the case here. You could not make it any clearer, the option is to shut down and leave the US.
It is equally clear that the concern is the Wilmigton jobs, not the air force jobs. Is there supposed to be some gratification if they force them out and you manage to kill the other jobs in the US?

Sure there is. If DHL is gone...bye bye...hasta la vista...then the air park goes to the State or Wilmington. Then long term lease is signed with ABX for MRO work and some jobs get to stay in ILN. They may be all Mx work, but it's work and ABX does not need to keep looking at Grissom for the space they need.

As far as no anti-trust case, I did not know you were an expert or even a lawyer. So please fill us laymen in Mr.Expert. I am all ears.

 

[100-1/2]

Let them go! The DHL/ABX deal should have never been approved to begin with. It straddled so many federal boundary limits for foreign purchase/acquisition/operation of a US corporate entity> It wasn't funny then, nor is it now. Everyone thought it would be a good idea at the time and all looked well, but you spit on the thousands of workers and families affected at CVG when DHL was permitted to pull-out of there leaving that airport and area holding the check for all the new construction, facilities and leases. No one cried foul then. DHL figured the US would just roll right over again if ILN sunk as well selling off the markets to the number 2 US Express Cargo Shipper. Frank laughed at as he packed his bags for ILN and he will rollinng all over the deck as the ship sets sail for Europe if you think anti-trusts scare him.

100-1/2

 

[Big Beer Belly]

DHL offered to donate air park weeks ago!

...then the air park goes to the State or Wilmington. Then long term lease is signed with ABX for MRO work and some jobs get to stay in ILN. They may be all Mx work, but it's work and ABX does not need to keep looking at Grissom for the space they need.

DHL to Donate Hub to Community (Aircargo Asia Pacific, July 2)
DHL reportedly has offered its Wilmington, Ohio freight hub operation – both land and facilities - to the local community if the company signs its deal with UPS to have UPS handle all of DHL's US air cargo transport. DHL has said it expects to negotiate the UPS deal within three months.
DHL has said it would consider publicly donating the 2,200-acre Wilmington property if the UPS deal goes through, in order to help Ohio.
The property includes two runways, control tower and dozens of buildings, including more than one million square feet of cargo sorting space.
A DHL deal with UPS could cost 6,000 jobs at ABX Air, 1,200 at DHL and 1,000 at ASTAR at Wilmington, where DHL is the largest employer.
http://tinyurl.com/6pu67o

 

[shooter]

Let them go! The DHL/ABX deal should have never been approved to begin with. It straddled so many federal boundary limits for foreign purchase/acquisition/operation of a US corporate entity> It wasn't funny then, nor is it now. Everyone thought it would be a good idea at the time and all looked well, but you spit on the thousands of workers and families affected at CVG when DHL was permitted to pull-out of there leaving that airport and area holding the check for all the new construction, facilities and leases. No one cried foul then. DHL figured the US would just roll right over again if ILN sunk as well selling off the markets to the number 2 US Express Cargo Shipper. Frank laughed at as he packed his bags for ILN and he will rollinng all over the deck as the ship sets sail for Europe if you think anti-trusts scare him.

100-1/2

Hey 100 1/2, got that truck driving school phone number handy? I think I will need it no matter what filters out of this $#17 soup.

And for what it's worth, I do think anti-trust scares him. If it stops the deal from happening he said he will leave the US market. Well lets see shall we. Over 40% of his international product starts in, comes through or terminates in the US market. I say we see if he true to his word. We are all out of jobs if he stays with UPS or leaves. But something tells me he is full of the same soup we are swimming in and he KNOWS he cant leave the US market. So without UPS he will be forced to sharpen his pencil and learn how to run an express business in the US or forfeit 40% of his international freight.

 

[shooter]

DHL to Donate Hub to Community (Aircargo Asia Pacific, July 2)
DHL reportedly has offered its Wilmington, Ohio freight hub operation – both land and facilities - to the local community if the company signs its deal with UPS to have UPS handle all of DHL's US air cargo transport. DHL has said it expects to negotiate the UPS deal within three months.
DHL has said it would consider publicly donating the 2,200-acre Wilmington property if the UPS deal goes through, in order to help Ohio.
The property includes two runways, control tower and dozens of buildings, including more than one million square feet of cargo sorting space.
A DHL deal with UPS could cost 6,000 jobs at ABX Air, 1,200 at DHL and 1,000 at ASTAR at Wilmington, where DHL is the largest employer.
http://tinyurl.com/6pu67o

I had seen that they would consider donating the air park earlier, BBB. That was in response to the politicians asking them to do it. Nothing done, of course and maybe later they will consider to keep it for drag strip races. Until then ABX is planning on moving to Indiana. More ILN jobs lost.

 

[Big Beer Belly]

And for what it's worth, I do think anti-trust scares him. If it stops the deal from happening he said he will leave the US market. Well lets see shall we. Over 40% of his international product starts in, comes through or terminates in the US market. I say we see if he true to his word. We are all out of jobs if he stays with UPS or leaves. But something tells me he is full of the same soup we are swimming in and he KNOWS he cant leave the US market. So without UPS he will be forced to sharpen his pencil and learn how to run an express business in the US for forfeit 40% of his international freight.

My opinion only... but DHL will clearly not abandon its US business... too many of its clients demand service to/from the US. DHL might just close EVERYTHING in the US with yellow currently on it and farm its ENTIRE US ops to UPS... pickup, sort, ground/air transport, and final delivery.

DHL can't afford the current money losing biz model, yet must have access to the US market. It'll simply be a wholesale outsourcing, not a merger. I highly doubt UPS is interested in a merger of any sort, however limited, with DHL (DPWN.)

BBB

 

[shooter]

My opinion only... but DHL will clearly not abandon its US business... too many of its clients demand service to/from the US. DHL might just close EVERYTHING in the US with yellow currently on it and farm its ENTIRE US ops to UPS... pickup, sort, ground/air transport, and final delivery.

DHL can't afford the current money losing biz model, yet must have access to the US market. It'll simply be a wholesale outsourcing, not a merger. I highly doubt UPS is interested in a merger of any sort, however limited, with DHL (DPWN.)

BBB

Outsourcing to your competitor is called a joint venture and is against anti-trust laws. From what I understand from reading about it.

EDIT: I think it also is referred to in a horizontal merger verbiage. So basically DHL and UPS can call this deal anything they want to. But the reality of business models being presented as we know it today (without anything in a contract to pull from) seems to be able to be stopped by the DOJ. IMO

 

[EMBPILOT1]

Shooter, let me ask you a question. Let's say that this deal took another turn in another time and place. Let's say everything is the same with reguards to the change in vendor(not merger as you see it). Let's now say UPS and DHL agree to keep all 8000 employees at Wilmington with same pay and benefits. Do you think anyone would care?

Now you have your opinions, which I respect. But I have other, I believe more educated opinions which lead me to believe otherwise. I have said it before and will say it again, that if it were not for the terrible loss of jobs, this would be like a fart in the wind. The politicians are doing what they do, which is to protect their district. They can call it anti-trust, you can call it anti-trust, but at the end of the day, it is nothing more than an attempt to save jobs.

And no the DOJ cannot stop a change in vendor, even if it is with a competitor. Actually DHL could claim that not going forward with the UPS deal could lead to even less competition.

The bottom line is that someone is going to have to prove that this deal is going to be bad for the consumer. When you threaten to pull out of the US market and leave 2 companies to choose from, well, that ain't good for the consumer.

 

[shooter]

Shooter, let me ask you a question. Let's say that this deal took another turn in another time and place. Let's say everything is the same with reguards to the change in vendor(not merger as you see it). Let's now say UPS and DHL agree to keep all 8000 employees at Wilmington with same pay and benefits. Do you think anyone would care?

Now you have your opinions, which I respect. But I have other, I believe more educated opinions which lead me to believe otherwise. I have said it before and will say it again, that if it were not for the terrible loss of jobs, this would be like a fart in the wind. The politicians are doing what they do, which is to protect their district. They can call it anti-trust, you can call it anti-trust, but at the end of the day, it is nothing more than an attempt to save jobs.

And no the DOJ cannot stop a change in vendor, even if it is with a competitor. Actually DHL could claim that not going forward with the UPS deal could lead to even less competition.

The bottom line is that someone is going to have to prove that this deal is going to be bad for the consumer. When you threaten to pull out of the US market and leave 2 companies to choose from, well, that ain't good for the consumer.

A change in vendor would be to use World or Amerijet. Using UPS is using your competitor. I would expect your "more educated opinions" would understand who is a competitor and who is not. Not that I am judging your "more educated opinion". I understand it takes much more know how to read the misspelled labeling in the Brazilia. :laugh: just kidding.

I do not know if the DOJ will kill this deal due to anti-trust any more than you know they will not. I admit that, you seem to think you are above it. But from what I have read and understand, there is very strong case that it will be heard by the DOJ and has a very strong chance to be stopped as a result. If your "more educated opinions" can show me different, I am willing to listen.

EDIT:

When you threaten to pull out of the US market and leave 2 companies to choose from, well, that ain't good for the consumer.

You do NOT turn your back on US law due to threats, and the end result would be the same; 2 air options, which you just said "ain't good for the consumer".

 

[EMBPILOT1]

Father retired attorney
Uncle attorney
Uncle retired Federal judge in the great state of Ohio

I think I will will respect what they say more than anything I read on FI.

your lawyers always say you have a great case when they are taking your money. Your always gonna win too. I would rather listen to someone who does not have a dog in the race. :beer:

 

[Big Beer Belly]

I have said it before and will say it again, that if it were not for the terrible loss of jobs, this would be like a fart in the wind. The politicians are doing what they do, which is to protect their district. They can call it anti-trust, you can call it anti-trust, but at the end of the day, it is nothing more than an attempt to save jobs.

And no the DOJ cannot stop a change in vendor, even if it is with a competitor.

I agree completely. In my admittedly lay perspective I see no anti-trust issue. DHL will continue to offer its services after the UPS deal just as they do now. A change in vendors does not reduce or eliminate competition and will be largely transparent to DHL customers. I see no anti-trust issue with a simple change in vendors.

Beyond what's stated above, all I've read is a LOT of what if's, what might be's, this must be what they're planning, hyperbole and innuendo, conspiracy theories, idle ramblings, etc... The facts are DHL expanded their presence in the US domestic market through acquisitions of existing companies and through poor management, poor execution and very tough embedded competition they find themselves in a situation of accelerating losses. They chose to switch US vendors and radically overhaul plans for a substantial domestic presence in the US beyond what is minimally required to service their international product.

By choosing this course of action, they fix and dramatically reduce their future capital outlays as there is no need to upgrade/expand sort facilities, increase workers, modernize aircraft fleets, etc... If their market share is reduced in the US then so is their bill to UPS, unlike their current arrangement of large fixed costs.

They can even argue it is more environmentally friendly to "capacity share" and not fly around a bunch of half-empty fossil fuel burning, greenhouse gas emitting, climate changing evil machines!


BBB

 

[fob727]

Norm, you're back!

We haven't had anybody spew BS here for a while. I guess you didn't get asked to the hearing today.
Maybe we'll see you and hear more nonsense next month in D.C.

If it doesn't agree with your opinion, it's hyperbole, innuendo, and idle ramblings.

A$$hole!

 

[Big Beer Belly]

Norm, you're back!

We haven't had anybody spew BS here for a while. I guess you didn't get asked to the hearing today.
Maybe we'll see you and hear more nonsense next month in D.C.

If it doesn't agree with your opinion, it's hyperbole, innuendo, and idle ramblings.

A$$hole!

fob... your incessant whining, keen intellect and vocabulary is predictable... brings a smile to my face.

BBB

 

[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.