Here is the article I believe you are referring to. No such announcement. Just speculation on how much Purple and Brown might pick up. Mar. 6 Commercial Appeal business section:
FedEx, UPS look to gain if DHL scales back
By Jane Roberts (Contact)
Thursday, March 6, 2008
Analysts expect money-losing DHL will scale back in the United States and could make the announcement as early as today, handing FedEx Corp. and UPS a boon.
If DHL closes terminals and hubs, analysts say FedEx could get 35 percent of the lost business in the air and another 25 percent on the ground.
If the restructuring costs DHL 2 percent of revenue, FedEx stands to gain $45 million in business, according to a research note published Wednesday by Edward Wolfe. UPS, which has a more powerful ground network, stands to realize $71 million.
In 2004, DHL advertising envisioned head-to-head competition with FedEx in the United State. Today the company may announce it is scaling back its U.S. operations by closing hubs and terminals, which would give a boost to FedEx and UPS.
DHL, a subsidiary of Deutsche Post World Net, is the fourth-largest player in the U.S. overnight package business, with revenues in the Americas for 2008 estimated at $2.3 billion.
With 9 percent market share, DHL trails the U.S. Postal Service, (32 percent) FedEx (31 percent) and UPS (25 percent).
DHL joined the competitive U.S. overnight business in 2003 when it purchased Airborne Freight for about $1 billion, rankling FedEx and UPS, which accused the monopoly Deutsche Post of investing in a U.S. carrier to fight them on their own turf.
Both pressed the issue in lawsuits, which Airborne eventually won.
Airborne was the low-cost alternative to the big players, claiming about 10 percent of the domestic air express market and 2 percent on the ground.
DHL came in promising a threat to the established carriers, but in reality has kicked little sand in their faces, mostly because it has made a series of integration and operational errors that shook customer confidence.
Analysts estimate DHL has lost $2.8 billion in North America, including a recent $748 million write-down in the United States alone, where it has also announced 600 layoffs.
Wolfe expects DHL will close 85 small ground and air terminals -- as much as 25 percent of its U.S. capacity -- to stem the losses.
Satish Jindel, principal transportation analyst at SJ Consulting in Pittsburgh, says DHL will keep the U.S. markets it needs to protect the interests of global customers.
"I expect they will partner with other companies to handle business with smaller U.S. markets," he said.
Tuesday, Deutsche Post said it planned to split its logistics division into two divisions with separate executive boards. A second announcement could come today when Deutsche Post meets with analysts in Bonn, Germany.
Many analysts, including Wolfe, expect a more detailed plan will emerge in April or May when a DHL Teamsters contract will be ratified.
"DHL is in a tough position because if its customers believe there's even a chance it will leave the U.S., its competitive position will be compromised," Wolfe said. "At this point, we expect modest restructuring efforts will be announced March 6 ... with more restructuring to come."
For months, the buzz has been that FedEx or UPS was planning to buy the U.S. assets. That seems unlikely, based on antitrust issues, experts say.
"I think the antitrust people would not look too kindly on it," said Aaron Gellman, professor at the Transportation Center at Northwestern University. "It would be good enough if DHL just disappeared from a competitive standpoint."
Most doubt that will happen. Instead, analysts expect the deeply entrenched DHL will take time to retool and rise again.
"The burden of proof is always on anyone who suspects DHL doesn't have good strategy," said Paul Stewart, chief executive of 4-Elements Inc., a third-party logistics company headquartered in Arkansas. "They are a proven worldwide logistics organization."
Contact Jane Roberts at 529-2512.
http://www.commercialappeal.com/news...sed-to-profit/