UPS: No 'significant' cargo flights from DHL until 2009

[Publishers]

DHL already gave up the US. They are only trying to keep it going to the extent of international relationships and customers. If they shut down completely, it would hurt the international customer base.

 

[b707guy]

The only difference is the USPS is helped along by all of us, the tax payer.

It's always been my impression that the USPS is the only government entity that is wholly self-sufficient, with no reliance on taxpayers for its revenue. Which would make it a competitor, at least in a part of the market.

 

[Airbus300]

Google search USPS and anti-trust immunity... Here is just one of the many articles pointing out that the USPS is not subject to anti-trust laws.

The Postal Service also enjoys exemption from most taxes and the ability to borrow from the Treasury at below-market rates. It also gets cushy legal perks - like immunity from antitrust prosecution, truth-in-advertising laws, SEC transparency requirements, and parking tickets.

 

[Fly Astar Jets]

When all said and done, this is no different from what FedEx and UPS have done with the postal contract. With the exception of the number of jobs lost, it almost the same type of deal. The USPS changed venders providing transportation of packages, not delivery of packages. There is a difference, and DHL and UPS will argue this point. This is not a merger, but a change of vendor. And I don't think you will find anyone in government who is going to force DHL to continue to take the losses they are taking. Either the jobs get lost to UPS, or they get lost.

EP1,

You can't use the FDX/USPS arrangement when talking about the proposed DHL/UPS deal. It's apples and oranges. By law, the USPS being a part of the federal government is immune from antitrust violations.

UPS argued vehemently against the FDX/USPS deal on antitrust issues in '01 and had got the DOJ to investigate it. Ultimately the complaint was dropped due to the inherent antitrust protection the USPS enjoys.

FAJ

EDIT: If I would have read the thread to it's end, I would have seen that others have already pointed out the antitrust immunity the USPS enjoys.

 

[shooter]

Political pressure is officially out of just Ohio lawmakers hands.

http://www.thespectrum.com/apps/pbcs.dll/article?AID=/20080804/NEWS01/80804014

August 4, 2008



[FONT=Times New Roman, serif]Senators express concern over delivery srevices' agreement[/FONT]
WASHINGTON – Today, Sen Orrin Hatch, R-Utah, and Herb Kohl, D-Wis, called for federal review of a proposed arrangement between United Parcel Service and DHL Express US, the second and third largest overnight package delivery services in the United States.
In a letter to Assistant Attorney General Thomas Barnett of the U.S. Department of Justice’s Antitrust Division and U.S. Federal Trade Commission Chairman William Kovacic, Kohl and Hatch stated the 10-year contract for UPS to become the exclusive provider of air transportation for DHL’s North American package delivery service raises important antitrust and competition issues.
Their letter is published below:

Dear Assistant Attorney General Barnett and Chairman Kovacic:

On May 28, 2008, DHL Express US (“DHL”) and United Parcel Service, Inc. (“UPS”) announced their intention to enter into a contract where UPS will become, for ten years, the exclusive provider of air transportation for DHL’s North American package delivery service. As the Chairman and Ranking Republican Member of the Senate Antitrust Subcommittee, we believe that this proposed agreement raises important antitrust and competition issues that should be examined carefully by the Department of Justice (“Department”) or the Federal Trade Commission (“Commission”).

UPS and DHL are, respectively, the second and third largest overnight package delivery services in the United States. Therefore, if consummated, DHL will become 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, since UPS will now have a large role in determining the cost and quality of DHL’s services. In addition, we presume that such a relationship would also require DHL to adopt UPS’s package tracking, labeling and hub distribution systems. Whether, and how, DHL packages will receive priority should UPS planes fill to capacity is another concern raised by this deal. As a result, some critics of the proposed agreement contend that DHL will become a captive of UPS, rather than an independent competitor. Further, having only two airlines providing national airlift capacity for overnight package delivery could raise the risk of serious economic disruption should service on one of these two airlines be reduced due to unforeseen difficulties, such as a strike, maintenance issues, weather disruptions or other similar disruptive events.

It has been reported that the parties are close to finalizing this agreement. The prospect of a quick ratification is equally disconcerting since the proposed contract will have a devastating financial impact on DHL’s current air transport providers, ABX Air and ASTAR and these airlines’ base of operations, southern Ohio.

It should be noted that we have not reached a conclusion as to the legality of this proffered transaction under the antitrust laws. However, due to the issues raised above and urgency of this matter, we respectfully request that the antitrust agencies initiate an investigation into this arrangement immediately.

Thank you for your consideration of this matter.

Sincerely,

Herb Kohl and Orrin Hatch

 

[shooter]

double post...:blush:

 

[flyinboxes]

Google search USPS and anti-trust immunity... Here is just one of the many articles pointing out that the USPS is not subject to anti-trust laws.

The Postal Service also enjoys exemption from most taxes and the ability to borrow from the Treasury at below-market rates. It also gets cushy legal perks - like immunity from antitrust prosecution, truth-in-advertising laws, SEC transparency requirements, and parking tickets.

AMEN, finally someone hits it.

 

[flyinboxes]

DHL-UPS merger proposal becomes campaign issue

By Jessica Wehrman
Staff Writer

Wednesday, July 30, 2008
If the proposed DHL-UPS deal to merge air operations — a decision that could cost the Wilmington region some 8,000 jobs — weren't yet a campaign issue, it officially became one Tuesday, July 29.
Sen. John McCain, presumptive Republican nominee for president, and Sen. Barack Obama, the presumptive Democratic nominee, sent out dueling media releases on the merger within hours.
McCain will go to Wilmington in early August for a campaign trip to DHL. Obama recently met with the mayor and DHL workers.
Tuesday, McCain's camp issued a statement backing the congressional delegation's efforts to save the jobs in Wilmington. He also said he supports their efforts to have the transaction reviewed "by several federal and state agencies" for any violations of law.
Obama issued a letter to the White House Domestic Policy Council asking for a careful examination of the merger.

 

[EMBPILOT1]

Obama is then going to Louisville to support UPS and its employees. Give me a break guys. Have you not learned that politicians will play both sides of the fence to get a vote?

And another thing, Obama is so full of it he doesn't even know that this is not a merger. I really want this tool running our country.

 

[eatme]

Lets say this thing gets shotdown, then what? What is plan B for ASTAR/DHL, if their is one.

 

[hvydriver]

Lets say this thing gets shotdown, then what? What is plan B for ASTAR/DHL, if their is one.

Hey, I'll the first to admit we don't know what the plan would be. All DPWN will say is that there is a "plan B" should the UPS deal not go through. Total shutdown, drawdown, who knows? The only thing we know for sure is that "Plan A" sucks, and must be destroyed.

 

[eatme]

Hey, I'll the first to admit we don't know what the plan would be. All DPWN will say is that there is a "plan B" should the UPS deal not go through. Total shutdown, drawdown, who knows? The only thing we know for sure is that "Plan A" sucks, and must be destroyed.

Shutting down would enable them to cede the US market to Fedex and UPS, that doesn't seem likely or logical. They are proposing to pay UPS 1 billion a year haul their freight, if it doesn't go through then what about a recapitalization of your air fleet and or overhaul of your ground delivery system. It does seem that some sort of outsourcing is inevitable, what do your unions say about all this? ppicketing and going the legislative route seem to be slender threads to hang your hopes on, contrary to what you believe, I do wish the best for your pilot groups.

 

[hvydriver]

Shutting down would enable them to cede the US market to Fedex and UPS, that doesn't seem likely or logical. They are proposing to pay UPS 1 billion a year haul their freight, if it doesn't go through then what about a recapitalization of your air fleet and or overhaul of your ground delivery system. It does seem that some sort of outsourcing is inevitable, what do your unions say about all this? ppicketing and going the legislative route seem to be slender threads to hang your hopes on, contrary to what you believe, I do wish the best for your pilot groups.

Well, my guess would be that they would do a controlled drawdown, with a possiblity of a refleet. (If Purple and Brown would please quit buying all the available airframes, that would be a help.) However, DPWN has not made a rational business decision yet in regards to DHL so, I'm not willing to put any money on that. As to picketing, legislative, and civil, (Astar ALPA has filed suit against DHL) other than torches and pitchforks, I don't know what else we could do. DHL/UPS have an exclusivity (sp?) agreement in place, so the way I understand it, they legally can't discuss any options with either ABX or Astar till the large lady sings on the UPS deal.

 

[Publishers]

In Orin Hatches letter, he expresses concern over the issue that DHL would not be able to compete with UPS. In fact, this whole plan concedes that they cannot compete and really want to only maintain a presence in the market because they have to for international reasons. Using that concept, the senator has no real argument.

 

[hvydriver]

In Orin Hatches letter, he expresses concern over the issue that DHL would not be able to compete with UPS. In fact, this whole plan concedes that they cannot compete and really want to only maintain a presence in the market because they have to for international reasons. Using that concept, the senator has no real argument.

I think you may have misconstrued what he said Publishers. Here's the full letter, and what I think you misread is highlighted:

August 1,2008​

The Honorable Thomas Barnett
Assistant Attorney General
Antitrust Division
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530

The Honorable William E. Kovacic
Chairman
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Dear Assistant Attorney General Barnett and Chairman Kovacic:

On May 28, 2008, DHL Express US (“DHL”) and United Parcel Service, Inc. (“UPS”) announced their intention to enter into a contract where UPS will become, for ten years, the exclusive provider of air transportation for DHL’s North American package delivery service. As the Chairman and Ranking Republican Member of the Senate Antitrust Subcommittee, we believe that this proposed agreement raises important antitrust and competition issues that should be examined carefully by the Department of Justice (“Department”) or the Federal Trade Commission (“Commission”).

UPS and DHL are, respectively, the second and third largest overnight package delivery services in the United States. Therefore, if consummated, DHL will become 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, since UPS will now have a large role in determining the cost and quality of DHL’s services. In addition, we presume that such a relationship would also require DHL to adopt UPS’s package tracking, labeling and hub distribution systems. Whether, and how, DHL packages will receive priority should UPS planes fill to capacity is another concern raised by this deal. As a result, some critics of the proposed agreement contend that DHL will become a captive of UPS, rather than an independent competitor. Further, having only two airlines providing national airlift capacity for overnight package delivery could raise the risk of serious economic disruption should service on one of these two airlines be reduced due to unforeseen difficulties, such as a strike, maintenance issues, weather disruptions or other similar disruptive events.

It has been reported that the parties are close to finalizing this agreement. The prospect of a quick ratification is equally disconcerting since the proposed contract will have a devastating financial impact on DHL’s current air transport providers, ABX Air and ASTAR and these airlines’ base of operations, southern Ohio.

It should be noted that we have not reached a conclusion as to the legality of this proffered transaction under the antitrust laws. However, due to the issues raised above and urgency of this matter, we respectfully request that the antitrust agencies initiate an investigation into this arrangement immediately.

Thank you for your consideration of this matter.

Sincerely,



______________________­­­­­­­­­­­­­­­­­­­­­­­
HERB KOHL ORRIN G. HATCH
Chairman, Subcommittee on Ranking Member, Subcommittee on
Antitrust, Competition Policy Antitrust, Competition Policy, and
and Consumer Rights Consumer Rights