Deutsche Post Chief Defends DHL-UPS Air Deal
Deutsche Post Chief Executive Officer Frank Appel defended the company’s DHL unit’s pending deal with UPS Inc. under which DHL Express would contract out its North American air operations to UPS, the Wall Street Journal reported Thursday.
Appel told the paper the deal was necessary to avoid huge losses at the DHL unit, which are running at $5 million a day.
Congress is likely to hold hearings on the deal, prompted by concerns raised by Ohio lawmakers over the likely closing of DHL’s Wilmington, Ohio, air hub, which could lead to the loss of 8,000 jobs, the paper said.
But Appel characterized the deal as critical to saving 43,000 U.S. DHL jobs and said it should not raise antitrust concerns as it would make DHL a customer of UPS, and said the deal would not be a merger, the Journal reported.
Both prospective presidential candidates, Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.), have also weighed in with concerns about the deal’s impact on Ohio, a key swing state in the upcoming election, the Journal said.
The deal would make DHL the largest customer of UPS and would add about $1 billion in revenue annually to UPS.
UPS is ranked No. 1 and DHL Americas is No. 3 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
