FedEx sues US govt over shipment restrictions
June 25 2019 11:27 PM
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The silhouettes of pedestrians are seen walking past a FedEx Corp vehicle in the Midtown neighbourhood of New York.

AFP, Bloomberg/New York

American logistics giant FedEx sued the US government on Monday, saying Washington’s restrictions on exports and imports due to growing trade disputes and sanctions created an “impossible burden” for delivery firms.
The announcement of the lawsuit comes as Beijing and Washington face off in a trade war that has seen both sides exchange steep tariffs on hundreds of billions in exports.
The US has also sought to bar Chinese telecom giant Huawei from the American market and limit its ability to purchase US technology.
A statement by the delivery firm said the restrictions placed “an unreasonable burden on FedEx to police the millions of shipments that transit our network every day” or face heavy fines.
The company said it was impossible for employees to determine “the origin and technological make-up of contents of all the shipments it handles and whether they comply with” US laws.
The statement was released hours after China called on FedEx to explain why a parcel from Huawei to the US went undelivered, in the second spat between the two companies in less than a month.
FedEx CEO Fred Smith told US broadcaster Fox News that “Huawei is just emblematic of this problem,” referring to what he described as the “confusing situations” that can emerge when employees sought to comply with the restrictions.
“Under the Department of Commerce’s regulations, we are expected to be the policeman for these export and import controls,” he said. “Despite the fact that we handle 15mn shipments a day, if we make an error on any one of them... we can be fined $250,000 per piece.”
IT publication PC Mag said on Friday a FedEx package to the US that contained a Huawei phone was returned to the UK.
An accompanying note explained a US government “issue” with China prevented the delivery.
FedEx apologised for the incident.
“The package in question was mistakenly returned to the shipper and we apologise for this operational error,” the company said in a statement.
The US logistics group is already under investigation in China for failing to deliver some of Huawei’s parcels, with the Chinese company saying it would review its ties to FedEx.
Shortly after Smith’s interview, Commerce Secretary Wilbur Ross told Fox News that “the regulation states that common carriers cannot knowingly ship items in contravention of the entity list or other export control authorities.”
“It does not require a common carrier to be a policeman or to know what’s in every package.”
Earlier this month, FedEx apologised for delivery errors on Huawei packages following reports that parcels were returned to senders, and China’s biggest tech company said it’s reviewing its relationship with the US delivery service. Two packages containing documents being shipped to the company in China from Japan were diverted to the US without authorisation, Reuters reported.
China ratcheted up tensions later by saying it was drawing up a list of “unreliable entities” that harm the interests of Chinese companies.



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