UPS will not join FedEx lawsuit against USA government

Joanna Estrada
June 29, 2019

The phone was being sent to a phone analyst, who posted a tweet about the package being sent back and containing a label that said FedEx rejected the parcel "due to US government issue with Huawei and the China government".

A note attached to the returned package said "parcel returned by FedEx, due United States government issue with Huawei and China government".

FedEx said in a statement Monday that the US Export Administration Regulations "violate common carriers' rights" by making delivery companies liable for shipments that may violate US restrictions.

The company also said it "can accept and transport all Huawei products except for any shipments to listed Huawei entities on the US Entity List".

FedEx argues that USA export control laws are impossibly burdensome for a common carrier like FedEx.

Asked about the botched deliveries in an interview with Fox News on Monday, FedEx CEO Fred Smith said "Huawei is just emblematic of this problem".

In fact, the Huawei P30 Pro that FedEx refused to ship still sells on Amazon's United States website.

The "issue" is that the U.S. Commerce Department placed Huawei on its prohibitive blacklist of foreign "entities" last month, marking Huawei as a threat to national security. Huawei was just lately added to a listing of firms barred from receiving USA expertise and not using a special license from the Commerce Department. Fortune reports that the American courier company is bring legal action against the USA government after becoming tangled in the dispute-the lawsuit doesn't specifically refer to Huawei by name, but it is likely that the Chinese telecommunications giant is involved in the complaint. FedEx is upset is has to check an unexpected large load of packages going out to Chin, er, overseas.

The Chinese government had already announced an investigation into FedEx in May after China-bound parcels had been mistakenly sent to the US. "(B) ecause we've seen decade of low returns, low margins and peak economic activity that can't put in a pretty good return, but still never really crossing that threshold of covering the cost of capital".

It seems that the FedEx's lawsuit comes from the need to cover its back in case it gets sued again by the United States government, like the latter did in 2014 for allegedly shipping packages full of drugs from illegal online pharmacies.

Earlier this month, the Chinese authorities launched a probe into the US-based courier giant over claims it had botched the delivery of several Huawei packages amid the ongoing rift between Washington and Beijing over the tech behemoth.

FedEx wants a so-called safe harbor - a provision that would protect it from being penalized if it didn't know that a particular shipment would violate the export rules.

FedEx reported a net loss of $2 billion for the quarter ending May 31, compared with $1.1 billion in profits in the year-ago period.

Other reports by Click Lancashire

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