DPWN Announces US Plan
Still Trampin' the Ramp
Thread Starter
Join Date: Nov 2000
Location: Right in the middle of UK
Age: 76
Posts: 282
Likes: 0
Received 0 Likes
on
0 Posts
DPWN Announces US Plan
Hot off the press, the DPWN release regarding the US network -
Bonn, May 28 2008: Deutsche Post World Net, the world’s leading transport and logistics
company, today announced a plan to restructure its DHL U.S. Express business by
working with UPS for airlift capacity and reducing costs in its ground infrastructure. Under
the plan, DHL and UPS have agreed to develop a contract whereby UPS will provide air
uplift for DHL Express U.S. domestic and international shipments within North America. In
addition, DHL will align its U.S. Express infrastructure to existing shipment volumes by
redesigning its ground linehaul network to better match capacity with customer
requirements. The impact on service levels will be minimal with less than 4 percent of
shipments affected. DHL remains focused on delivering international and domestic
Express products, offering an attractive alternative for U.S. customers and keeping a
strong commitment to the U.S. market.
The restructuring plan will lead to sustainable improvements in financial performance and
provide a sound starting point for a more efficient and customer-oriented business in the
future. In 2008, the company expects an underlying EBIT loss of $1.3 billion in U.S.
2/4
Express. Through the expected cost savings of around $800 million in 2010 and around
$1 billion in 2011, underlying EBIT will improve accordingly. First positive effects of the
plan will start showing already in 2009. The company expects to spend up to $2 billion to
finance the restructuring plan. Due to the uncertain economic situation in the U.S.,
Deutsche Post World Net is reducing its guidance for underlying EBIT in the EXPRESS
Corporate Division in 2008 to around 400 million euros from around 500 million euros.
Subsequently, the Group’s full-year guidance before non-recurring effects and
restructuring costs will be reduced slightly by 100 million euros to around 4.1 billion euros.
“We have promised to relentlessly focus on improving financial performance and
delivering on our Roadmap to Value program. I am confident we have found a sustainable
way forward for U.S. Express in the best interest of customers, employees and investors,”
said Deutsche Post World Net Chief Executive Officer Frank Appel at a press conference
in Bonn. “Taking a pragmatic approach, we will go on to be a smarter player in the
challenging U.S. Express market. We will continue to offer premium service to customers
who rely on DHL as the leading network operator across the globe. And we will continue
to leverage our express, logistics and mail offerings, which in combination make DHL
unrivalled as the world’s leading logistics company.”
DHL is taking action both in its infrastructure network and in aviation with a restructuring
plan that focuses on three main elements:
1. Reducing infrastructure network capacity by approximately 30 percent through the
following detailed measures:
o Consolidating and closing smaller sorting facilities into modernized, larger
stations, resulting in reductions of approximately 34 percent
o Rationalizing pickup and delivery routes by 17 percent, including new courier
routing plans to enable better route planning and avoiding peaks in the
operation, as well as making changes to staffing plans
o Ground linehaul network rationalized by 18 percent through improved capacity
utilization and footprint reductions in some remote areas.
2. A proposed contract between DHL and UPS whereby UPS will provide air uplift for
DHL Express U.S. domestic and international shipments within North America
3. Reduction in overhead and other administrative costs
3/4
As one central part of its restructuring activities, DHL and UPS will pursue a contract to
provide air uplift, creating a single airline partner for DHL Express in the U.S. DHL will
continue to operate its courier and ground network as well as pickup and delivery services
to its customers across the country. The proposed agreement, in character and scope
representing an efficient model in the express industry, will extend for 10 years. The
commencement of UPS service into the DHL network is expected to begin later this year.
The proposed contract provides both DHL and UPS substantial economic benefits in the
U.S. Express market, which remains one of the most challenging marketplaces worldwide
in light of the current economic downturn. DHL will continue to compete in the U.S. market
under its own brand, offering attractive value to customers. The restructuring action in no
way diminishes DHL’s commitment to retaining a significant presence in the U.S. market,
which is key to DHL’s global network.
“Our future focus will be where customers have told us they need to do business the most.
Our entire network restructure will enable us to bring a new level of reliability and
increased service performance to our international and U.S. domestic customers while
cutting unnecessary costs such as maintaining infrastructure that customers don’t ask for,”
said John Mullen, Deutsche Post World Net Management Board Member and Chief
Executive Officer of DHL Express.
DHL’s strategic priorities in the U.S. will be to continue to provide record service reliability,
and accelerating growth in more profitable segments of the market through leveraging
innovative sales channel strategies like the recently announced Walgreens partnership. In
addition, DHL will be more selective in accepting business from a small number of
scarcely populated areas and take advantage of capacity and cost reductions to grow a
leaner and more focused ground business.
To drive the implementation of the restructuring plan, DHL recently announced the
appointment of long-time DHL senior executive, Ken Allen, as CEO of DHL Express U.S.
Allen has extensive experience executing restructuring plans within DHL. In his previous
role as CEO of DHL Express Eastern Europe, Middle East and Africa (EEMEA), Allen has
doubled revenue growth and margin within two years. In addition, his experience as CEO
of DHL Express Canada resulted in turning many years of negative performance into what
is now positive financial development for the company.
Bonn, May 28 2008: Deutsche Post World Net, the world’s leading transport and logistics
company, today announced a plan to restructure its DHL U.S. Express business by
working with UPS for airlift capacity and reducing costs in its ground infrastructure. Under
the plan, DHL and UPS have agreed to develop a contract whereby UPS will provide air
uplift for DHL Express U.S. domestic and international shipments within North America. In
addition, DHL will align its U.S. Express infrastructure to existing shipment volumes by
redesigning its ground linehaul network to better match capacity with customer
requirements. The impact on service levels will be minimal with less than 4 percent of
shipments affected. DHL remains focused on delivering international and domestic
Express products, offering an attractive alternative for U.S. customers and keeping a
strong commitment to the U.S. market.
The restructuring plan will lead to sustainable improvements in financial performance and
provide a sound starting point for a more efficient and customer-oriented business in the
future. In 2008, the company expects an underlying EBIT loss of $1.3 billion in U.S.
2/4
Express. Through the expected cost savings of around $800 million in 2010 and around
$1 billion in 2011, underlying EBIT will improve accordingly. First positive effects of the
plan will start showing already in 2009. The company expects to spend up to $2 billion to
finance the restructuring plan. Due to the uncertain economic situation in the U.S.,
Deutsche Post World Net is reducing its guidance for underlying EBIT in the EXPRESS
Corporate Division in 2008 to around 400 million euros from around 500 million euros.
Subsequently, the Group’s full-year guidance before non-recurring effects and
restructuring costs will be reduced slightly by 100 million euros to around 4.1 billion euros.
“We have promised to relentlessly focus on improving financial performance and
delivering on our Roadmap to Value program. I am confident we have found a sustainable
way forward for U.S. Express in the best interest of customers, employees and investors,”
said Deutsche Post World Net Chief Executive Officer Frank Appel at a press conference
in Bonn. “Taking a pragmatic approach, we will go on to be a smarter player in the
challenging U.S. Express market. We will continue to offer premium service to customers
who rely on DHL as the leading network operator across the globe. And we will continue
to leverage our express, logistics and mail offerings, which in combination make DHL
unrivalled as the world’s leading logistics company.”
DHL is taking action both in its infrastructure network and in aviation with a restructuring
plan that focuses on three main elements:
1. Reducing infrastructure network capacity by approximately 30 percent through the
following detailed measures:
o Consolidating and closing smaller sorting facilities into modernized, larger
stations, resulting in reductions of approximately 34 percent
o Rationalizing pickup and delivery routes by 17 percent, including new courier
routing plans to enable better route planning and avoiding peaks in the
operation, as well as making changes to staffing plans
o Ground linehaul network rationalized by 18 percent through improved capacity
utilization and footprint reductions in some remote areas.
2. A proposed contract between DHL and UPS whereby UPS will provide air uplift for
DHL Express U.S. domestic and international shipments within North America
3. Reduction in overhead and other administrative costs
3/4
As one central part of its restructuring activities, DHL and UPS will pursue a contract to
provide air uplift, creating a single airline partner for DHL Express in the U.S. DHL will
continue to operate its courier and ground network as well as pickup and delivery services
to its customers across the country. The proposed agreement, in character and scope
representing an efficient model in the express industry, will extend for 10 years. The
commencement of UPS service into the DHL network is expected to begin later this year.
The proposed contract provides both DHL and UPS substantial economic benefits in the
U.S. Express market, which remains one of the most challenging marketplaces worldwide
in light of the current economic downturn. DHL will continue to compete in the U.S. market
under its own brand, offering attractive value to customers. The restructuring action in no
way diminishes DHL’s commitment to retaining a significant presence in the U.S. market,
which is key to DHL’s global network.
“Our future focus will be where customers have told us they need to do business the most.
Our entire network restructure will enable us to bring a new level of reliability and
increased service performance to our international and U.S. domestic customers while
cutting unnecessary costs such as maintaining infrastructure that customers don’t ask for,”
said John Mullen, Deutsche Post World Net Management Board Member and Chief
Executive Officer of DHL Express.
DHL’s strategic priorities in the U.S. will be to continue to provide record service reliability,
and accelerating growth in more profitable segments of the market through leveraging
innovative sales channel strategies like the recently announced Walgreens partnership. In
addition, DHL will be more selective in accepting business from a small number of
scarcely populated areas and take advantage of capacity and cost reductions to grow a
leaner and more focused ground business.
To drive the implementation of the restructuring plan, DHL recently announced the
appointment of long-time DHL senior executive, Ken Allen, as CEO of DHL Express U.S.
Allen has extensive experience executing restructuring plans within DHL. In his previous
role as CEO of DHL Express Eastern Europe, Middle East and Africa (EEMEA), Allen has
doubled revenue growth and margin within two years. In addition, his experience as CEO
of DHL Express Canada resulted in turning many years of negative performance into what
is now positive financial development for the company.
Join Date: Aug 2006
Location: 123 main street
Posts: 18
Likes: 0
Received 0 Likes
on
0 Posts
How the f*** in 3 years did DHL destroy the Airborne Express customer base so bad they had to crawl to UPS to deliver their stuff?? ABX was in business for 50 yrs and air ops for 25,
Thanks DHL
Thanks DHL
Join Date: Dec 2003
Location: Gone from the FL sun to the desert Oasis
Age: 60
Posts: 199
Likes: 0
Received 0 Likes
on
0 Posts
Trust me, we Astar folk aren't happy either.
Hvydriver,
What is going to happen to the B767F that is soon to be delivered to
you guys. Any chance you will jump into the Latin American ACMI pool?
Hvydriver,
What is going to happen to the B767F that is soon to be delivered to
you guys. Any chance you will jump into the Latin American ACMI pool?
Join Date: May 2001
Location: Area 52
Posts: 180
Likes: 0
Received 0 Likes
on
0 Posts
http://www.aircargoworld.com/break_news/05292008a.htm
DHL Closing Wilmington Hub
DHL plans to close its air sort hub in Wilmington, Ohio, as part of its far-reaching restructuring of its financially troubled U.S. express business.
The air sort hub will be closed once DHL phases out its outsourced flying with ABX Air and ASTAR Air Cargo, and turns that business over to its competitor UPS. Some air freight will be shifted to UPS's Louisville hub this year, said Jonathan Baker, DHL director of public relations, with full transition to be completed by the end of 2009.
The fate of other segments of DHL's Wilmington business remains unclear. The Wilmington airport, which DHL owns, would remain open for now, as will the various facilities on site.
DHL said it has not decided whether it will sell the airport, the largest privately owned airport in the United States.
Wilmington is also DHL's largest ground sorting facility and is used to clear and sort international air freight. "We're studying what to do with those operations, whether to remain in Wilmington or go to alternative locations," Baker said.
Robert W. Moorman
DHL Closing Wilmington Hub
DHL plans to close its air sort hub in Wilmington, Ohio, as part of its far-reaching restructuring of its financially troubled U.S. express business.
The air sort hub will be closed once DHL phases out its outsourced flying with ABX Air and ASTAR Air Cargo, and turns that business over to its competitor UPS. Some air freight will be shifted to UPS's Louisville hub this year, said Jonathan Baker, DHL director of public relations, with full transition to be completed by the end of 2009.
The fate of other segments of DHL's Wilmington business remains unclear. The Wilmington airport, which DHL owns, would remain open for now, as will the various facilities on site.
DHL said it has not decided whether it will sell the airport, the largest privately owned airport in the United States.
Wilmington is also DHL's largest ground sorting facility and is used to clear and sort international air freight. "We're studying what to do with those operations, whether to remain in Wilmington or go to alternative locations," Baker said.
Robert W. Moorman
Join Date: May 2007
Location: Middle East
Posts: 10
Likes: 0
Received 0 Likes
on
0 Posts
DHL had no choice and has been reviewing this for years. Astar and ABX were and are instransigent, expensive and uncompetitive. They had guarantees in terms of their profitability and had literrally bled DHL alive for years. Having said that DHL's incompetance for either agreeing the terms initially and not doing something about it sooner is right up their with the Astar and ABX failings.
To use a rugby term, they have "pulled the maul down on themselves" now though and will get hurt from here on it, its big its brown and its going to own your town.!
To use a rugby term, they have "pulled the maul down on themselves" now though and will get hurt from here on it, its big its brown and its going to own your town.!
Join Date: Feb 2004
Location: USA
Posts: 118
Likes: 0
Received 0 Likes
on
0 Posts
Say Roger,
Have you ever heard the saying, "Better to keep your mouth closed and be thought a fool, than to open it and remove all doubt?" Maybe that should be your new mantra.
Have you ever heard the saying, "Better to keep your mouth closed and be thought a fool, than to open it and remove all doubt?" Maybe that should be your new mantra.
hvy
If you are directly affected by ths move then I am sincerely sorry to hear that.
But what roger says is true. DHL have been pondering this for a few years now, and if they didnt do it what is the alternative?
Continue losing Millions?....nope
Pull out the USA altogether?.....not a chance?
Outsource and hope to reduce costs......Yep
I was surprised though that it was UPS, our money was on the USPS (I think thats what its called.... sorry I am other side of the pond).
Its important now to realise DHL (as correctly put in the title of this thread) are now DPWN.....the German Post Office. Not just a freight integrator anymore.
Don't get me wrong, its is a terrible shame as I have friends who work in ILN HUB, but it's a reality of life these days ......outsource.
Imagine being the guy at DHL who suggested UPS over the boardroom table for the 1st time though. Bet he was given some funny looks
If you are directly affected by ths move then I am sincerely sorry to hear that.
But what roger says is true. DHL have been pondering this for a few years now, and if they didnt do it what is the alternative?
Continue losing Millions?....nope
Pull out the USA altogether?.....not a chance?
Outsource and hope to reduce costs......Yep
I was surprised though that it was UPS, our money was on the USPS (I think thats what its called.... sorry I am other side of the pond).
Its important now to realise DHL (as correctly put in the title of this thread) are now DPWN.....the German Post Office. Not just a freight integrator anymore.
Don't get me wrong, its is a terrible shame as I have friends who work in ILN HUB, but it's a reality of life these days ......outsource.
Imagine being the guy at DHL who suggested UPS over the boardroom table for the 1st time though. Bet he was given some funny looks
Join Date: Feb 2004
Location: USA
Posts: 118
Likes: 0
Received 0 Likes
on
0 Posts
In point of fact Beer, I'm with Astar. This company did everything that was asked of it by the Postmen. The funny part is that they are keeping what has truly troubled the US market, which is the ground delivery network. While at the same time, managing to give away all operational control to their primary competitor. Absolutely amazing. DHL will be signifigantly smaller than it is now inside of 3 years. Uncompetitive? Of course we are/were! We were slaves to the DHL machine. It's in our ACMI that we can't do anything but a handful of DOD work outside of DHL flying.
hvy my man
Dont get me wrong, I am on your side.
But the old Fritz post boys are leaking money like crazy in the US, and at some point it had to stop.
They will use a 3rd party (UPS) to fly the cargo and DHL deliver (or so I understand).
Unsympathetically....a good idea
Put your business brain on though and ok its a reasonable idea in the short term.
Probably not so good mid / long term......doesnt help the rumours about the boys in brown buying out the boys in yellow though
Dont get me wrong, I am on your side.
But the old Fritz post boys are leaking money like crazy in the US, and at some point it had to stop.
They will use a 3rd party (UPS) to fly the cargo and DHL deliver (or so I understand).
Unsympathetically....a good idea
Put your business brain on though and ok its a reasonable idea in the short term.
Probably not so good mid / long term......doesnt help the rumours about the boys in brown buying out the boys in yellow though
Join Date: Feb 2006
Location: USA
Posts: 13
Likes: 0
Received 0 Likes
on
0 Posts
The ignorance and naivety of you folks in Europe simply astounds me. You folks just don’t get it. Very quickly there won’t be anything left of DHL in the States. The last chunk of customers you haven’t yet lost will be Fedex and UPS customers before you know it.
The USA is still the biggest part of the world economy. And very soon DHL will be little more than an afterthought to the US customer. DHL worldwide won’t survive this decision.
The USA is still the biggest part of the world economy. And very soon DHL will be little more than an afterthought to the US customer. DHL worldwide won’t survive this decision.
Join Date: Feb 2004
Location: USA
Posts: 118
Likes: 0
Received 0 Likes
on
0 Posts
Beer, turning over control of your product to a competitor is never a good idea. When the 80,000 payload a/c has 70,000# of Brown packages, and another 30,000# of yellow packages that need to go on it as well, which color boxes do you think will get left behind? I'm thinking yellow.
Join Date: May 2007
Location: Middle East
Posts: 10
Likes: 0
Received 0 Likes
on
0 Posts
Surely not more logic...
hvydriver - Whilst I to am sympathetic to anyones demise, I apologise if the facts dont make good reading another good old saying is "when you are in a hole, know when to stop digging" - Theres no point in having 30,000 packages if you lose money on all of them and thats the harsh reality.
Penguin - you do make an interesting point too, but DHL have analysed that they make EUR1.3bn in the rest of the world in express dox and packages and only 25%, they estimate will be affected by the retrenchment of their US position. TNT survived when they did it and have remained profitable, but you are right with the exception of the downtown areas of the major cities DHL is retreating from the US.
Next questions are 1. What happens to the B767F programme EU-US that was planned 2. Kalitta Mail programme US-ME 3. PO Transpac programme - will be limited to Transpac 4. Aerologic Airline will then be limited to EU-AP vv. They have their own network in EU and now UPS in US - Man thats alot of sorting to be done, with different equipment, Hubs and Management and therefore cost....1 step forward 2 steps back...
I shall shut up now, so hvydriver can compliment me by thinking of me as a fool....rather than knowing it.
Penguin - you do make an interesting point too, but DHL have analysed that they make EUR1.3bn in the rest of the world in express dox and packages and only 25%, they estimate will be affected by the retrenchment of their US position. TNT survived when they did it and have remained profitable, but you are right with the exception of the downtown areas of the major cities DHL is retreating from the US.
Next questions are 1. What happens to the B767F programme EU-US that was planned 2. Kalitta Mail programme US-ME 3. PO Transpac programme - will be limited to Transpac 4. Aerologic Airline will then be limited to EU-AP vv. They have their own network in EU and now UPS in US - Man thats alot of sorting to be done, with different equipment, Hubs and Management and therefore cost....1 step forward 2 steps back...
I shall shut up now, so hvydriver can compliment me by thinking of me as a fool....rather than knowing it.