DOT Rules on Petitions Against DHL

The U.S. Department of Transportation has ruled on several petitions directed against two DHL companies: DHL Worldwide Express and DHL Airways.

The DOT denied a petition to cancel the registration of DHLWE as a foreign freight forwarder, saying that there is no evidence that DHLWE is competing or will compete unfairly with U.S. companies. But the department could take action in the future if there are specific allegations of unfair competition. Also, while declining to initiate a formal enforcement proceeding to investigate the citizenship of DHL Airways, the department will continue its ongoing informal review of the cargo carrier to make sure that it remains a citizen of the United States as defined by law.

“We have an affirmative responsibility to make sure that competition continues to protect the interests of consumers. While we are denying these petitions, we will continue to ensure that competition in our aviation markets remains fair,” said U.S. Transportation Secretary Norman Y. Mineta.

In February, United Parcel Service asked DOT to cancel the registration of DHLWE to operate as a foreign freight forwarder, arguing that Deutsche Post, the majority owner of a holding company that owns DHLWE, would use its monopoly profits to enable DHLWE to engage in predatory pricing in the United States. Deutsche Post is the partially privatized postal service of Germany.

Federal Express and UPS also filed complaints in January with DOT alleging that after a proposed corporate reorganization, foreign nationals, including Germany’s postal system Deutsche Post, would control DHL Airways. Under U.S. law, at least 75 percent of the voting stock of a U.S. airline must be owned by citizens of the United States, and the president and two-thirds of the board of directors and other managing officers must be U.S. citizens. In addition, the carrier must be controlled by U.S. citizens. FedEx and UPS asked DOT to conduct a formal enforcement investigation of DHL Airways’ citizenship.

The DOT, by denying UPS’ petition against DHLWE, said that foreign companies may be licensed as freight forwarders in both domestic and international air transportation. But DOT said that there is no evidence that there has been any unfair competition in the U.S. market by any of these DHL companies.