Senators seek antitrust probe of UPS/DHL plan

WASHINGTON (Reuters) - Lawmakers overseeing antitrust matters in the U.S. Senate urged the Bush administration on Monday to investigate a proposal for UPS Inc to fly packages in North America for Deutsche Post express unit DHL.

"We believe that this proposed agreement raises important antitrust and competition issues that should be examined carefully by the Department of Justice or the Federal Trade Commission," Sens Herb Kohl and Orrin Hatch said in a letter to top officials at each agency.

Kohl, a Wisconsin Democrat, is chairman of the antitrust subcommittee. Hatch, a Republican of Utah, is the panel's ranking member.

UPS said recently it was making progress on concluding the 10-year agreement to haul packages by air for struggling DHL within the United States and between the United States, Canada, and Mexico. The companies proposed the deal in May.

Kohl and Hatch are concerned about the potential competitive impact on DHL if it were to partner with UPS.

"Some critics of the proposed agreement contend that DHL will become a captive of UPS, rather than an independent competitor," they wrote.

"Having only two airlines providing national airlift capacity for overnight package delivery could raise the risk of serious economic disruption should one of these two airlines be reduced due to unforeseen difficulties," Kohl and Hatch said.

FedEx Corp is the primary competitor of UPS.

(Reporting by John Crawley; Editing by Braden Reddall)