FedEx Sues U.S. Government over Huawei Export Restrictions | Financial Buzz

FedEx Sues U.S. Government over Huawei Export Restrictions

America’s multinational courier FedEx (NYSE: FDX) is suing the U.S. government on the grounds that it should not be held liable for unintentionally shipping Trump administration-banned exports to some Chinese companies. The logistics firm is fed up with being responsible for the extra work the U.S. government imposed on them by issuing the restriction laws. 

In a court filing in the District of Columbia, FedEx said the laws “essentially deputize FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally.” The courier added that it is a “transportation company, not a law enforcement agency.” 

As a leading delivery firm, FedEx has to keep a close eye on the goods being transferred into the country. “Under the Department of Commerce’s regulations, we are expected to be the policeman for these export and import controls,” said FedEx CEO Fred Smith. 

The biggest issue the Company faces is the shipments of Huawei products into the U.S. communication market. FedEx has stated that it is impossible for its employees to determine the legality of Huawei products that are shipped into the U.S. The Company handles millions of shipments every day, but one mistake could cost it a quarter of a million dollars.

President Trump’s current ban on Huawei products follows a similar one issued last year where restrictions prevented Huawei equipment to be used by the U.S. federal government. In addition, Huawei and its 70 subsidiaries and affiliates were added onto a trade blacklist by the Department of Commerce. 

In the midst of the Huawei package confusion, FedEx returned a PCMag writer’s package which contained a Huawei phone back to the U.K. after reaching its destination in the U.S.’s lead mobile analyst, Secha Segan tweeted out on June 21st, “This is totally ridiculous. Our UK writer tried to send us his @HuaweiMobile P30 unit so I could check something – not a new phone, our existing phone, already held by our company, just being sent between offices – and THIS happened @FedEx,” followed by a picture of the package with a label saying “PARCEL RETURNED BY FEDEX, DUE U.S. GOVERNMENT ISSUE WITH HUAWEI AND CHINA GOVERNMENT.”

FedEx realized its mistake and issued an apology saying “the package in question was mistakenly returned to the shipper and we apologize for this operational error.”