09.18.08

Leahy, Brown Urge DOJ To Examine Proposed DHL-UPS Contract

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Senator Sherrod Brown (D-Ohio) sent a letter Thursday to the Department of Justice Antitrust Division Assistant Attorney General, Thomas Barnett, outlining concerns about the proposed contract uniting DHL Express US and United Parcel Service, Inc.  The proposed contact would make United Parcel Service, Inc. (UPS) the exclusive airlift service for DHL’s North American operations for the next ten years.

 

Leahy and Brown expressed concern about the competition issues raised by such a contract.  The two companies compete with Federal Express in domestic oversight delivery service, and UPS and DHL hold the second and third largest market share, respectively.

 

“Should this agreement be consummated, it appears that DHL would effectively cease to be a competitor to UPS, and instead would become a captive customer,” Leahy and Brown wrote.  “In short, many of the concerns about a merger by which the number of genuine competitors in the marketplace would be reduced from three to two are also present in this situation.”

 

Leahy and Brown also wrote of their concerns of the impact of the contract on airlines that provide services to DHL.  Two Ohio-based airlines, ABX Air and ASTAR, provide overnight services for DHL.

 

The full text of the Leahy-Brown letter follows.  A PDF is available online.

 

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