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The network fee was intended to compensate DHLI for central
facilities and services--including the air transportation
network, clearinghouse hubs at air terminals, customs clearing
services, know-how, insurance, and advertising--that DHLI
provided for the benefit of the local operating companies and
agents. Although DHL was DHLI’s pickup and delivery agent in the
United States and DHLI was DHL’s pickup and delivery agent
outside the United States, with extremely limited exceptions, no
fees or costs were paid for those services exchanged between them
until 1987.
Foreign operating companies and independent agents were
required to use the DHL trademark so as to be identified as part
of the DHL network. A trademark license was included as part of
the agreements with the local operating companies and agents.
The agreements with foreign local operating companies and agents
generally did not require a separate payment for royalties. On
occasion, it was necessary to include nominal royalty provisions
in agreements with local operating companies and agents in order
to comply with local law. Sometimes the royalties were credited
against the network fee. The network fee remitted to DHLI and
related corporations included payment for the capital
infrastructure, operating expense, know-how, and sometimes a
nominal amount for use of the DHL name provided by the DHL
network.
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