DHL Testifies Before House Panel on UPS Air Deal

DHL Americas

DHL Express Global Chief Executive Officer John Mullen told a House panel Tuesday that the company’s proposed deal to let UPS Inc. handle its North American air services was necessary for the company “to remain a viable competitor in the U.S. market.”

Mullen said in written testimony before the House Judiciary Committee that the pending deal with UPS “does not violate antitrust laws and does not decrease competition in any way.”

The Department of Transportation said late last month that it would not block the deal, which was first announced in May, when the two firms reached agreement for UPS to handle DHL’s North American air shipments, which would add $1 billion to UPS’ annual revenue. (Click here for previous coverage.)

Mullen said that DHL, a unit of Germany-based Deutsche Post, trailed rivals UPS and FedEx Corp. in U.S. air shipments, despite a $5 billion investment since 2003 in its U.S. market presence.

“Despite DHL’s heavy investment and determined efforts to build credibility in the U.S. market, its air express volumes have declined over this period, due in part to the generally deteriorating market conditions in the U.S. overnight air sector,” he said in his testimony.

The House Transportation and Infrastructure Committee scheduled a hearing for Sept. 16 on UPS and DHL, Bloomberg reported.

Ohio congressional representatives were concerned about the impact in DHL’s air hub in Wilmington, Ohio, and company officials have had extensive meetings since May with Ohio officials, including Gov. Ted Strickland (D), to help retrain affected employees, Mullen said.

UPS is ranked No. 1 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers, while DHL Americas is ranked No. 3.