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Jan 19, 2011

INVESTIGATION * USA - FedEx and UPS under investigation by U.S. Department of Justice

Allegations of price-fixing


Washington,DC,USA -Transport Intelligence (UK), by Thomas Cullen -10 Jan 2011: -- The story appears to have first surfaced late last week in local press reports in Atlanta, where UPS is based. These revealed that the Department of Justice had approached a consultancy called AFMS Logistics Management, which itself had brought a case against the express parcel giants alleging that the two companies were unfairly taking measures to obstruct AFMS's business... The Department of Justice investigation appears to be directly linked to the allegations that UPS and FedEx attempted to discourage businesses from using AFMS Logistics Management services and other businesses of its type... Portland Oregon based AFMS is a 'rate consultant', specialising in reducing shipping costs for commercial users of parcel services through network analysis and price negotiation. It is reported to have major shippers as clients. The consultancy accuses FedEx and UPS of initiating a programme that cost it tens of millions of dollars... It is unclear exactly what the exact chain of events has been, although AFMS is reported to have stated that the Department of Justice approached it for information and this triggered the investigation... 'Rate consultants' have existed for a number of years, providing information to shippers on best rates and often handling negotiations, something which can result in one carrier being played-off against another. Obviously, this does not make rate consultants very popular with carriers...

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