English Arabic Armenian Azerbaijani Chinese (Simplified) Chinese (Traditional) Czech Danish Dutch Estonian Filipino Finnish French Galician Georgian German Greek Hindi Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Lithuanian Malay Maltese Norwegian Persian Polish Portuguese Russian Slovak Slovenian Spanish Swedish Thai Turkish Ukrainian Vietnamese

UPS purchase of TNT duopoly claim

BRUSSELS: In a newly published summary, the European Commission (EC) says the decision to block the UPS acquisition of TNT Express in 2013 was based on its conclusion that the intra-European express market would have been dominated by just two companies – DHL and UPS.

The EC began its merger due diligence on the assumption there are a number of different operators active in the industry: integrators, national and local postal operators, partner networks and freight forwarders - each of them with a different operating model based on the structure and type of its network.

TNT LiegeThe EC determined the main characteristic of an integrator is its full operational control over the logistics of the parcel delivery from origin to destination, including air transport. Within the European Economic Area (EEA) that means UPS, TNT, DHL and FedEx.

National mail operators, while operating extensive ground networks, could not be considered "fully-fledged competitors and exert a sufficient competitive constraint on integrators" because they do not operate their own aircraft fleets.

As a result, the EC focused on the competitive counterbalance of FedEx to a merged UPS/TNT and DHL. It determined that FedEx was the weakest of the four integrators and post-merger would have held the smallest market share in all 29 EEA-countries with a less-developed network and therefore "significantly higher costs than those of UPS and TNT".

So the EC concluded that FedEx wouldn't have provided sufficient competition to the resultant duopoly of a merged TNT/UPS and DHL – apparently a view shared by customers as well as other operators.

Commenting on the publication of the EC conclusions, UPS said the decision last April "prevented a sizeable investment in Europe of approximately US$6.8 billion, better services and pricing, and more important, an improvement of the European logistics infrastructure in those economies that are still struggling to return to economic growth".

The company said the EC's decision – which cost it US$200 million in cancellation fees to TNT - was not based on an accurate assessment of the multi-product nature of customer contracts, only focused on next day cross-border shipments, ignored evidence about the strength and number of other competitors, and considered only a fraction of the efficiencies that would have been created following the acquisition.

The UPS statement did not acnowledge the EC's main conclusion in respect to FedEx and the lack of equivalent competition.

News

Written on 18/08/2017, 21:43
mexico-boosts-miami-air-cargo-volumeMIAMI: August 17, 2017. Miami International Airport has reported a 4.8 percent growth in cargo traffic for the first half of 2017 with domestic traffic...
Written on 17/08/2017, 18:44
turkish-cargo-helps-save-livesMOGADISHU: August 15, 2017. In March this year actor Ben Stiller and other celebrities launched a viral crowdfunding appeal on behalf of the famine in...
Written on 17/08/2017, 18:01
first-flight-out-for-hungarian-horsesBUDAPEST: August 15, 2017. Cargolux and Hellmann Worldwide Logistics have flown 14 Hungarian-bred racehorses from Budapest via Luxembourg and Beijing to...
Written on 11/08/2017, 15:35
european-commission-supports-hna-purchase-of-frankfurt-hahn-airportFRANKFURT HAHN: August 10, 2017. The HNA Group has completed its acquisition of Frankfurt-Hahn airport from the German state of Rhineland-Palatinate. The...
Written on 10/08/2017, 21:40
veteran-wins-fedex-grant-to-upcycle-military-surplusMEMPHIS: August 10, 2017. FedEx has awarded the Grand Prize in its 2017 small business grant competition to Sword & Plough founders Emily Núñez...
Written on 10/08/2017, 15:39
fortune-50-companies-back-no-fee-recruitment-in-supply-chainsNEW YORK, NY: AUGUST 07, 2017. Ford, General Motors, Hormel Foods, Marriott Hotels and Michael Kors have agreed to promote ethical labor policies in their...
Written on 08/08/2017, 02:14
matson-to-add-marshall-islands-serviceHONOLULU: AUGUST 07, 2017. Matson is adding to its Marshall Islands (RMI) service in the first quarter of 2018 with a new biweekly sailing from...
Written on 04/08/2017, 20:56
xpo-on-the-m-a-road-againGREENWICH, CT: August 04, 2017. XPO Logistics has reported a net income of US$73.2 million on revenue of US$7.3 billion for the first six months of...
Written on 03/08/2017, 17:48
ups-provides-logistics-key-to-circular-business-solutionATLANTA: August 02, 2017. UPS is helping New Jersey-based Terracycle turn hard-to-recycle items into trashcans and park benches while diverting 40 million...
Written on 03/08/2017, 13:50
hyperloop-one-lifts-offNEW YORK: August 02, 2017. Following a successful first test last month, the vacuum transport system built by Hyperloop One has now reached a speed of 192...
Written on 02/08/2017, 16:28
no-american-investment-from-qatar-airwaysDOHA: August 02, 2017. Qatar Airways is not proceeding with its initial 7.5 percent "passive" stake in American Airlines (AA) for an estimated US$808...
Written on 28/07/2017, 20:54
turkey-logistics-investment-continuesISTANBUL: July 27, 2017. Private equity manager Abraaj Group has acquired an unspecified "significant minority" stake in Netlog Lojistik Hizmetleri, one...
Written on 27/07/2017, 17:55
supply-chain-staff-crisis-warns-dhlBONN: July 26, 2017. A report sponsored by DHL Supply Chain into a shortage of industry talent says as much as a third of the current workforce is at or...
Written on 25/07/2017, 20:14
dp-world-australia-wins-cosco-endorsementSYDNEY: July 25, 2017. DP World Australia has set up a logistics stevedoring subsidiary DP World Logistics Australia and full-service container park...
Written on 25/07/2017, 19:40
bollore-signs-new-cameroon-concessionKRIBI, Cameroon: July 25, 2017. CMA CGM and Bolloré Transport & Logistics have signed a 25-year concession to manage a new container terminal at the...
Written on 21/07/2017, 19:35
new-india-tax-will-mean-savings-say-expertsDELHI: July 21, 2017. The implementation of a new Goods and Services tax (GST) in India, as a replacement for a myriad of local and state levies, has...
Written on 20/07/2017, 22:27
america-s-largest-trade-gateway-aims-for-near-zero-emissionsSAN PEDRO BAY, CA: July 19, 2017. The ports of Los Angeles and Long Beach, America's two largest ports, have published a plan to reduce trucks and...
Written on 19/07/2017, 17:41
post-brexit-britain-to-rely-on-emerging-marketsBAAR, Switzerland: July 19, 2017. As Britain's Conservative government acknowledges the one-time cost of leaving the EU could be £66 billion, Agility...
Written on 18/07/2017, 18:26
politics-not-economics-key-to-inequality-says-researchBOSTON: July 17, 2017. Research by Oxfam suggests the poorest half of the world's population has received one percent of the total increase in global...
Written on 14/07/2017, 19:08
first-circular-economy-msc-launchedCRANFIELD, UK: July 14, 2017. Cranfield University is launching the world's first MSc course on the circular economy in October. The part-time...

- powered by Quickchilli.com -