.....and maybe the state of Ohio forgot about this story?
DHL fails to deliver the goods, agencies say
Ohio's courier draws complaints but says contract provisions met
Monday, November 21, 2005
Ted Wendling
Plain Dealer Bureau
Columbus - Nearly a year after Gov. Bob Taft helped DHL land exclusive rights to provide express-delivery services for the state government, officials at
several agencies are complaining that the contract has been a disaster.
Agency officials accuse DHL of a wide array of delivery problems, including losing State Highway Patrol paychecks; routing Health Department vaccine shipments to the wrong cities; overweighing Department of Transportation packages; overcharging the Department of Natural Resources thousands of dollars; and mistakenly turning over agency accounts to bill collectors.
"There is not a week that goes by that DHL does not mess something up," an Agriculture Department official grumbled in a Sept. 9 e-mail after the shipper destroyed water-quality samples mailed by an agency microbiologist.
"I received more calls than I can count from the DHL collections department," a Division of Wildlife employee fumed in a Sept. 28 e-mail. "Rest assured, we have not used DHL since February. From my perspective, DHL is a mess."
Those complaints are among dozens that state agencies have made since Jan. 1, when Ohio awarded DHL a $4.4 million contract to replace UPS as the state's exclusive courier. They contrast sharply with the German-owned shipper's current national ad campaign, which emphasizes customer service. In one TV spot, set to the music of "What the World Needs Now is Love," a series of vignettes features a delivery man crushing a package in an elevator door and a ham-handed bagger mashing the week's groceries with a half-gallon jug of milk.
"Whatever happened to customer service?" the ad says. "At DHL, it's alive and well."
DHL officials declined to answer questions, releasing a statement through Robert Mintz, the firm's public relations manager.
The statement said Ohio was required by law to award the contract to DHL because the company was the lowest bidder.
It also said DHL has met a contract requirement that 98 percent of deliveries be on time - a statistic that state officials rely on the contractor to monitor and report.
The billing issues, the statement said, "were quickly remedied and resolved. In addition, some service issues are unavoidable when a change in vendor takes place."
DHL won contract
after moving to Ohio
DHL was awarded the contract shortly after Ohio won a bidding war with Kentucky for a new DHL air cargo hub. The company agreed to move its hub from Cincinnati/Northern Kentucky International Airport in Hebron, Ky., to Wilmington, Ohio, in exchange for $122 million in tax breaks and incentives.
DHL was not considered for the state's delivery business until DHL officials complained to Taft's office that they had not been treated well when they had asked about reopening the contract. Records show that this was after the Department of Administrative Services had already asked UPS to renew the courier contract.
"By going directly to the governor's office, they bypassed standard business channels in an attempt to politically influence a procurement decision," DAS procurement supervisor Jeff Westhoven wrote to his boss, Richard Hickman, on Aug. 6, 2004. But Westhoven wrote that it could have been "simply a company being aggressive about competing for the state's business."
Taft spokesman Mark Rickel said the governor gave DHL a crack at the contract out of gratitude for DHL's decision to relocate its hub to Wilmington and create 900 more full- and part-time jobs.
"We had aggressively fought for DHL to select an Ohio site for its consolidated air and ground hub," Rickel said. "It was our position that if it made good business sense, the contract should be rebid."
DHL's $4.4 million bid was $170,000 less than UPS' bid. FedEx's bid was $4.7 million.
As for DHL's service problems, Rickel said: "We've recently become aware that some agencies are not happy with DHL's service. We expect DAS to rigorously enforce the contract with DHL."
Mintz's statement said DHL appealed to Taft's office "to ensure that the state of Ohio provided an opportunity for DHL to bid fairly on this contract."
A spokesman for UPS declined to comment.
Both Westhoven and Hickman, who is now executive director of the Ohio School Facilities Commission, said they don't recall any disputes with DHL officials over the courier contract. Westhoven also retreated on his claim that DHL used political influence to acquire the contract, saying simply, "They were obviously pushing for the opportunity to compete for the state's business."
Westhoven acknowledged that the
state has threatened several times to cancel DHL's contract, but he said most of the problems have been resolved.
"Certainly, we would always like vendors to be perfect, and perfect is the goal, but perfection is not the requirement in the contract," he said.
Similarly, Mintz's statement said DHL "has still met and in many cases exceeds" the contract requirements.
DHL's record pales
next to UPS'
Despite those statements, DAS records show that problems have persisted. The Department of Health and the Department of Public Safety got waivers from DAS to use other couriers for special deliveries. DAS has denied waiver requests from three other agencies, and LeeAnne Mizer, a spokeswoman for a fourth agency, the Department of Agriculture, said her agency is dissatisfied, too.
"We've taken our concerns to the Department of Administrative Services," she said. "There's not a whole lot more we can do at this time. It's still a problem."
DHL's record looks particularly bad when compared with that of UPS. In the six years that UPS had the contract - from October 1998 to December 2004 - agencies filed 16 "complaint to vendor" reports after being unable to resolve their disputes with UPS, requiring mediation by DAS. The reports typically involve multiple service complaints.
In comparison, agencies filed 15 complaint-to-vendor reports in the first 10 months of the contract with DHL.
A sampling:
After DHL repeatedly lost paychecks and other mail at the Ohio River Valley Juvenile Correctional Facility in southern Ohio, angry officials at the Department of Youth Services wrote, "It is unacceptable for us to continue to operate this way when we are talking about employees' paychecks and, therefore, we are officially requesting a waiver from utilizing DHL." The waiver was denied.
DHL lost three boxes of brochures that the state development department sent to Hanover, Germany. Then, development officials learned that a DHL driver was having an affair with a development employee and that the two were using drugs together on state time. DHL assigned another driver to the development account.
Informed that DHL had put a hold on the Mount Vernon Developmental Center's account due to an unpaid bill of $12.63, the center's business manager raged in an e-mail that DHL was, once again, wrong: "This morning at 8:23 a.m., I had the pleasure of receiving a call from . . . the credit collection agency hired by DHL. This is just classic. . . . I find this utterly ridiculous, especially in light of the fact that we have never received a statement of account NOR has anyone contacted me to discuss any outstanding invoices!"
DHL has fought back by blaming agencies for providing inaccurate addresses and ZIP codes. Its statement said "more than half of the complaints . . . were due to customer error," including unpaid invoices, wrong addresses and "improper documentation."
Occasionally, Gail Vorhees, DHL's national account manager, has resorted to sarcasm when responding to the barrage of complaints.
"Yet another state of Ohio blunder!" she wrote. "I think their employees might very well be hiding under rocks!"
DHL's statement said the disputes are temporary. DHL, the statement said, "looks forward to a long, superior service commitment to provide express delivery services to the state."
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