House to examine UPS-DHL pact

A House committee plans in September to look into DHL's proposed arrangement for UPS to handle its domestic United States airlift.

Transportation and Infrastructure Chairman Jim Oberstar, D-Minn., expressed concern about the tie up that would have DHL ditch its two existing contract carriers, ABX Air and Astar Air Cargo, in favor of using the UPS air network as part of a $1 billion cost-saving exercise in the U.S. market announced in May.

Just as I have opposed additional consolidation in air passenger service, I have serious concerns about the UPS-DHL alliance. My concerns include the transaction's effects on service, costs, consumer choice, and jobs, Oberstar said in a statement Friday. This alliance is likely to eliminate two cargo air carriers, ABX and ASTAR, which now serve DHL and compete with UPS. This would lessen, or even eliminate, competition between UPS and DHL in providing overnight package delivery services. No date was given for the upcoming hearing, which was requested by the Ohio congressional delegation as it tries to save up to 8,000 direct and indirect jobs at DHL's Wilmington overnight package terminal.