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payments should have been made for years prior to 1987 for excess
shipments (imbalance) and for transfer items handled by DHL for
DHLI. As to the 1987 year and later, respondent contends that
the 2-percent markup was not at arm’s length and was inadequate
to compensate DHL or DHLI.
Petitioners again argue that the arrangement between DHL and
DHLI was commercially reasonable and within a range that would
have resulted from arm’s-length negotiations between unrelated
parties. Petitioners argue that the approach used was comparable
to the express mail arrangements between the U.S. Postal Service
and other national postal administrations during the 1970’s or
about the same time as the reciprocity began between DHL and
DHLI. Petitioners also cited one such arrangement between
unrelated entities.
Respondent argues from a stronger position because of the
1987 implementation of a cost-plus arrangement for the excess or
imbalance. Petitioners try to explain this away by contending
that the circumstances extant at that time should not determine
what was commercially reasonable in earlier periods. Petitioners
also point out that DHL did not maintain detailed cost
information before 1987.
The parties proffered expertise to the Court on these
matters. Petitioners offered an economist who analyzed the
imbalance and transfer fees between DHL and DHLI and an economist
specializing in the economics of regulated industries, including
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