The US Congress will examine a planned US$10 billion outsourcing deal between DHL and United Parcel Service (UPS) on September 16.
Chairman of the House Transportation and Infrastructure Committee James Oberstar called for the hearing after DHL announced its plans to outsource packages in the US to UPS for a period of 10 years to cut costs.
The deal is worth around $1 billion annually but it will also cost the Ohio town of Wilmington 8,000 jobs.
Democratic and Republican members of Ohio's congressional delegation reacted with outrage to the news and have vowed to halt the deal.
It is an election year and the loss of jobs is a red hot topic among voters. Even Republican presidential candidate John McCain got on the case and last week asked for the government to investigate whether the deal would violate market competition laws.
With such high-profile opposition, the integrator can count on huge pressure being exerted against the plan in Congress from both sides of the political divide.
DHL bought Airborne Express three years ago and moved its US package operations to Wilmington Air Park. But if the UPS arrangement goes ahead, DHL will shift its delivery business to its US "rival's" Louisville operation.
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Source: cargonewsasia.com
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