"Deutsche Post suffered a setback in plans to turn round its unprofitable DHL Express business in the U.S. last week after UPS Chief Executive Scott Davis said the size and scope of a deal to transfer DHL's air services to its U.S. rival may be changed. The deal is key to Deutsche Postís $2-billion restructuring of its U.S. express business which is forecasting a loss of $1.3 billion this year."
I cannot confirm what your UPS Rep told you. My Rep was in the office today and didn't mention any such news. He has dropped less than subtle hints about DHL being a dieing business, not being able to keep up, losing revenue and market share, etc.
I am pretty sure I read an article recently discussing DHL's move to outsource its air shipments to UPS (lemme see if I can find it. Yep. Just type "DHL outsource air service" into G and you'll get tons of links to reports on it). It appears UPS had excess space on their planes, which they already own a sizable fleet of, and DHL trying to cut spending, so they structured a deal whereby UPS would be responsible for all DHL airfreight in North America.
No sign of news articles on DHL ceasing ground shipments in North America, though.
DHL has previously announced they are switching to UPS in Louisville, KY from ABX Air in Wilmington, OH (40 min. from Cincinnati). This is bad news for Wilmington as they are the largest employer at around 8000 jobs. Most of this is air package related though. Recently the UPS CEO has stated that the scope of the deal with DHL could change. He did not elaborate, though.
UPS reliability with lower DHL costs. Sounds like a good deal for shippers.
So it is true!
|FRANKFURT, Germany (AP) -- Deutsche Post AG will close all of its DHL Express service centers, cut 9,500 jobs in the United States and eliminate U.S.-only domestic shipping by land and air, the company said Monday, citing heavy losses and fierce competition. |
This will be a huge news for UPS. They will now be able to raise their rates for all of us.
DHL bought up a couple smaller courier companies here in Canada, Loomis for one. In the States I think they bought Airborne Express ... but I may be mistaken. So now there are really only main players in the US market, UPS, FedEx and USPS.
So get ready for your UPS rates to rise. Those of you who are DHL customers ... I warned you.
[edited by: Rugles at 2:31 pm (utc) on Nov. 10, 2008]
>>This will be a huge news for UPS
DHL is but 4% of US market. Maybe not such a huge deal for UPS and the others.
Recent ad on USA tv (Texas) reports DHL is gone USA markets. Confirmed by local news reports, too. No comment, merely a report.
As mentioned above DHL was planning to outsource a good portion of this work to UPS. Now it appears that UPS or FedEx will have an opportunity to pickup the business. A loss for the Wilmington and Louisville regions for jobs but overall the jobs will be picked up by the other two carriers nationwide.
|DHL is but 4% of US market. Maybe not such a huge deal for UPS and the others. |
It was only 4% but they were driving the price down because they were attempting to capture market share.
Expect prices to rise.
Anybody here going to be scrambling for a new courier?
[edited by: Rugles at 5:01 pm (utc) on Nov. 10, 2008]
one more thought...
I think that DHL was using the lure of ground service to capture more market share for the lucrative Air shipments. Kind of like a "loss leader".
There was an article on this subject in the Daily Telegraph yesterday.