Federal Express sues the US Department of Commerce and claims that US export control laws are so bad that FedEx is unable to comply with them. US laws "require significantly more screening than possible from regular carriers like FedEx," the company argues in a legal complaint filed in a DC federal court on Monday.
The lawsuit does not mention Huawei, but it was filed following a string of disputes between FedEx and Huawei that may be linked to US export control laws.
FedEx is one of the many international companies that feel pressure from the growing trade war between the United States and China. Last month, Trump administration let Huawei and its affiliates go to a "unit list" under the Export Control Act. It made it illegal to send a number of US technology to Huawei.
FedEx claims that US export control laws are impossibly burdensome for a common carrier such as FedEx. Theoretically, FedEx says the law requires FedEx to decide whether a package breaks the law by sending US technology to a prohibited entity. However, FedEx says most of the packages are sealed before shipment. Searching them all would not only be expensive, it could also be contrary to laws that protect the privacy of packages.
FedEx wants the courts to declare the Export Control Act constitutional, at least as it applies to regular carriers such as FedEx.
Interestingly, FedEx rival UPS does not seem to agree with Fedex's argument.
"We have had no special issues with shipping for Huawei or any of our other customers, and we would not be supportive of joining such a process or claim," a UPS spokesman told The Wall Street Journal .
The Huawei connection is scary
Since the Trump administration left Huawei to its export control list last year, FedEx and Huawei have been involved in a number of disputes over abused shipments.
In mid-May, Huawei accused FedEx of diverting two packages shipped from Japan to the United States, rather than delivering them to Huawei offices in China. The smartphone giant said FedEx planned to do the same with two other Huawei packages, also tied to Huawei offices in China. But for reasons that are not clear, the packages were sent back to their shippers in Vietnam.
Last week, Fedex was involved in controversy to send a Huawei phone tied back to the United States back to the UK consignor. The phone was sent by a British journalist at PC Mag to the magazine's New York office. After arriving at a FedEx facility in Indiana, the phone was flown back to the UK.
A note attached to the returned package said "package returned by FedEx, because of US government's problem with Huawei and China government."
FedEx said it did not generate the note and that all these events were isolated errors ̵
The FedEx lawsuit is widely reported as a response to these Huawei shipping nails, but it is not clear that they are actually linked. Huawei says the packages that were diverted in May had important business documents, not hardware that could be subject to US export restrictions. And US export laws should not limit the ability of a UK journalist to send a legally purchased Huawei phone to US counterparts.
Last year, FedEx was fined for 53 breaches of federal export control regulations. These violations involved the shipment of 52 airport sections to France in 2011 and an electron microscope to Pakistan in 2012.
What we do not know is what kind of back-stage calls FedEx has with the Trump administration. The US government can push FedEx to intensify its screening activities against Huawei. But Monday's FedEx lawsuit doesn't say so.