Huawei is ‘reviewing its relationship with FedEx‘ after it says packages sent between Japan and China were ‘diverted‘ to the U.S. amid trade battle

Chinese telecoms equipment maker Huawei is reviewing its relationship with FedEx Corp after it claimed the US-based package delivery company, without detailed explanation, diverted two parcels destined for Huawei addresses in Asia to the United States and attempted to reroute two others. 

Huawei, the world‘s largest telecom network gear maker leading the way in creating the next generation of wireless networks known as 5G, said on Friday that FedEx diverted two packages sent from and addressed to Huawei in to the United States.

The company also said FedEx attempted to divert two more packages sent from Vietnam to Huawei offices elsewhere in Asia, all without authorization. 

FedEx spokesperson Maury Donahue said the packages were ‘misrouted in error‘ after acknowledging in an earlier statement that the U.S. Department of Commerce had recently added the company to its ‘Entity List,‘ which names companies that are subject to specific license requirements before buying things from US providers.

This delivery mishap comes amid growing tension between China and the US over trade relations, including a court battle over a bill banning US federal government workers from purchasing Huawei products. 

Huawei said the four packages involved in the alleged rerouting by FedEx contained only documents and ‘no technology.‘ 

‘The recent experiences where important commercial documents sent via FedEx were not delivered to their destination, and instead were either diverted to, or were requested to be diverted to, FedEx in the United States, undermines our confidence,‘ Huawei spokesperson Joe Kelly said.

Kelly said the company will now have to review its requirements for document delivery support, implying its relationship with FedEx may be in flux. 

Huawei declined to elaborate on why it thought the packages may have been diverted. 

Huawei acknowledged that one package originating in Vietnam was received by Friday, and the other was on its way, according to FedEx tracking records provided by the company. 

Two packages sent on May 19 and May 20 from Tokyo, intended for Huawei in China, ended up in Memphis, Tennessee, where GFby May 23, according to images of FedEx tracking records shown to Reuters by Huawei.

The two packages originating from Hanoi on May 17, destined for Huawei‘s Hong Kong and Singapore offices, were held up after arriving in local FedEx stations in Hong Kong and Singapore on May 21 for ‘delivery exception,‘ according to other images Huawei showed Reuters.

According to FedEx‘s website, the status ‘exception‘ means an unexpected event is preventing delivery of a package, for example a customs delay, a holiday, or no one being available to accept delivery. FedEx declined to give details on what the exception was in this case.

According to Huawei, a FedEx customer service representative in Vietnam replied to their inquiry on May 22 when two expected packages did not arrive on time, saying: 

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‘Please be informed that FDX SG received notification from FDX US to hold and return the package to US. Hence, the shipment is not deliver to consignee and now being hold at FDX station and under process to RTS it (return to sender).

Huawei said that both Vietnam packages were sent by its shipping agent, a contractor to Huawei whom it did not identify, and contained urgent documents. 

Huawei said the shipping agent refused permission for FedEx to send the packages to the United States and instructed they be returned.

Huawei said it only learned that the Japan-originated packages, which were sent by suppliers that it did not identify, had been diverted to the United States after checking FedEx‘s tracking record.

The company said it has lodged a formal complaint with China‘s postal regulator, which it said is investigating the incident. 

FedEx China on Tuesday apologized on its Chinese social media account for the ‘mishandling‘ of Huawei packages and confirmed there was no ‘external pressure‘ to divert packages. 

China‘s State Postal Bureau did not return a request for comment.

FedEx spokesperson Donahue said, ‘This is an isolated issue limited to a very small number of packages,‘ referring to the four parcels affected. ‘We are aware of all shipments at issue and are working directly with our customers to return the packages to their possession.‘

She said that FedEx was not requested to divert the packages by any other party.

The U.S. Department of Commerce did not reply to a request for comment on whether the incident might be related to its move on May 16 to add Huawei to the so-called ‘Entity List,‘ preventing it buying certain items from U.S. companies without U.S. government approval. 

The United States believes Huawei is a potential espionage threat because of its close ties with the Chinese government.

Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services.

The US and China are involved in a trade dispute and tariff war that began last July, after President Donald Trump complained that China steals from or pressures foreign companies to hand over technology while unfairly subsidizing Chinese businesses.

The most recent round of negotiations earlier this month ended with no agreement, after Trump more than doubled duties on $200 billion (£158bn) in Chinese imports.

China responded by raising tariffs of 5 percent to 25 percent on $60 billion (£47.4bn) worth of American goods. 

Huawei has today filed a request asking a US court to bar legislation that bars federal agencies from buying its products.

Song Liuping, the firm‘s legal officer, said the company was due to file the motion for summary judgment on Tuesday.

The company is asking the US to scrap section 889 of the National Defense Authorization Act, which prohibits executive government agencies from procuring equipment from Huawei and its rival ZTE.