UPS will not join FedEx lawsuit against U.S. government

(Reuters) – United Parcel Service Inc said on Tuesday it would not join a lawsuit FedEx Corp filed against the U.S. government that argues FedEx should not be held liable if it inadvertently shipped products in violation of an export ban.

FILE PHOTO: The logo of United Parcel Service is seen at the new package sorting and delivery UPS hub in Corbeil-Essonnes and Evry, southern Paris, France, June 26, 2018. REUTERS/Charles Platiau/File Photo

FedEx’s announcement of its suit on Monday came shortly after the U.S. parcel delivery firm reignited Chinese ire over its business practices. A package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an “operational error.”

Chinese telecoms company Huawei Technologies Co in May was added to a blacklist of people and companies the U.S. government said posed a security risk, barring it from buying, without special approval, U.S. technology upon which it was heavily reliant. A number of other Chinese firms have also been banned from buying sensitive U.S. technology.

In its lawsuit, FedEx said it should not be expected to enforce the export ban, and could not reasonably be held liable for shipping products that it did not know about.

Commerce Secretary Wilbur Ross said in a statement that the regulation stated that carriers must not knowingly ship items in contravention of the rules. “It does not require a common carrier to be a policeman or to know what’s in every package,” he said.

UPS said in Tuesday’s statement it would continue to follow government directives across the markets where it operates.

Last month, China said it would launch an investigation after two parcels sent via FedEx destined for Huawei addresses in Asia were diverted to the United States. FedEx said the packages were “misrouted in error.”

In the latest incident, technology news outlet PCMag said that its writer in Britain had attempted to send a Huawei P30 handset to a colleague in the United States. FedEx returned the phone and told the sender that it could not deliver the package because of a “U.S. government issue” with Huawei and the Chinese government, PCMag reported.

FedEx’s lawsuit and Chinese anger over the deliveries come against a backdrop of increasing tension between the world’s two biggest economies.

Eric Hirschhorn, a former U.S. undersecretary of Commerce, said the lawsuit suggests “the company is caught in the middle between China and the U.S. They’re being squeezed by two governments that are annoyed at each other and they’re trying to do their business.”

Reporting by Rachit Vats in Bengaluru, Chris Sanders in Washington and Karen Freifeld in New York; Editing by Maju Samuel and Rosalba O’Brien

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