UPS, FedEx subject of US antitrust inquiry

Monday, 10 January 2011 00:01 - - {{hitsCtrl.values.hits}}

New York (Reuters): United Parcel Service Inc and FedEx Corp are under scrutiny from the US Justice Department over whether they broke antitrust law by trying to shut out bargain-hunting shipping consultants.

The department is focusing on whether the two largest package delivery companies are working to prevent clients from using third-party shipping consultants and negotiators to save money, said Maxwell Blecher, an antitrust attorney representing shipping consultant AFMS Logistics Management.

UPS and FedEx said they were aware of the investigation. The Justice Department declined comment.

Blecher said he had been contacted by a Justice Department attorney who had looked at a lawsuit that AFMS filed in August in Los Angeles.

Blecher arranged for the department’s antitrust division to talk to AFMS CEO Mike Erickson.

Erickson told Reuters that he talked to the Justice Department three or four weeks ago. “They asked a lot of questions that pertained to antitrust activity but also other things,” he said.

“We are aware of the investigation,” said FedEx spokesman Maury Lane. “We encourage our customers to work directly with us to determine the best FedEx service, shipping solutions and rate structure for them,” added Lane.

Susan Rosenberg, a UPS spokeswoman, said a preliminary investigation began in mid-November.

“They had asked UPS to respond voluntarily to questions and give them information on our policies.”

Rosenberg said that FedEx and UPS compete aggressively and that any assertion that they conspired was “a bit outrageous”.

“We have had policies to negotiate directly with our customers, and look at their shipping characteristics and build a program for them,” she added.