UPS to take over flying DHL packages in Europe and Asia?
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DHL is losing $5 million per day in the U.S.
That is about as clear as it gets unless someone can prove otherwise. Alternatives appear rather slim.
Deutsche Post CEO defends proposed U.S. job cuts - Forbes.com
Thomson Financial News
Deutsche Post CEO defends proposed U.S. job cuts
08.12.08, 4:29 AM ET
FRANKFURT (Thomson Financial) - Deutsche Post World Net AG. chief executive Frank Appel defended planned job cuts at the company's U.S. DHL business, insisting in response to criticism voiced by U.S. politicians that the reductions are needed to turn the division around.
'There's no real alternative. Otherwise we would threaten our entire express operations in the United States, and at the end of the day many more jobs (than currently) would be at stake,' he told Frankfurter Allgemeine Zeitung.
Appel added that DHL is losing $5 million per day in the U.S.
Deutsche Post is in talks with United Parcel Service Inc. (nyse: UPS - news - people ), to which it would like to outsource its U.S. air express services, while it is also restructuring its ground express services to reduce annual losses of some $1.3 billion to $300 million by 2011.
The plans involve the closure of a logistics hub at Wilmington, Ohio, while threatening up to 8,000 jobs at airline ABX.
Both U.S. presidential candidates, Democrat Barack Obama and Republican John McCain, have voiced antitrust concerns over the planned cooperation between DHL and UPS.
Appel said both companies would remain strong competitors, even though UPS provides services to DHL. He added that talks with local authorities and unions on severance packages are ongoing, but provided no details.
DHL's U.S. business has posted unspecified losses since entering the market in 2004 in the face of tough competition from incumbents UPS and FedEx Corp. (nyse: FDX - news - people ) Its market share is estimated at below 10 percent.
[email protected]
Deutsche Post CEO defends proposed U.S. job cuts - Forbes.com
Thomson Financial News
Deutsche Post CEO defends proposed U.S. job cuts
08.12.08, 4:29 AM ET
FRANKFURT (Thomson Financial) - Deutsche Post World Net AG. chief executive Frank Appel defended planned job cuts at the company's U.S. DHL business, insisting in response to criticism voiced by U.S. politicians that the reductions are needed to turn the division around.
'There's no real alternative. Otherwise we would threaten our entire express operations in the United States, and at the end of the day many more jobs (than currently) would be at stake,' he told Frankfurter Allgemeine Zeitung.
Appel added that DHL is losing $5 million per day in the U.S.
Deutsche Post is in talks with United Parcel Service Inc. (nyse: UPS - news - people ), to which it would like to outsource its U.S. air express services, while it is also restructuring its ground express services to reduce annual losses of some $1.3 billion to $300 million by 2011.
The plans involve the closure of a logistics hub at Wilmington, Ohio, while threatening up to 8,000 jobs at airline ABX.
Both U.S. presidential candidates, Democrat Barack Obama and Republican John McCain, have voiced antitrust concerns over the planned cooperation between DHL and UPS.
Appel said both companies would remain strong competitors, even though UPS provides services to DHL. He added that talks with local authorities and unions on severance packages are ongoing, but provided no details.
DHL's U.S. business has posted unspecified losses since entering the market in 2004 in the face of tough competition from incumbents UPS and FedEx Corp. (nyse: FDX - news - people ) Its market share is estimated at below 10 percent.
[email protected]
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U.S. Postal Service net loss of $1.1 billion.
“When the economy does rebound, mail volume may not return to previous levels,” said Postmaster General John Potter. “This requires that we significantly accelerate process improvements and the realignment of resources in order to achieve long-term financial success. Failure to do so will threaten our ability to meet our mission of providing universal service at affordable prices.”
The above quote means; We have hired consultants to evaluate the cost structure of the U.S. Postal Service. Possible cost savings include cancelling Saturday delivery of mail which will result in corresponding layoffs.
I wonder what Obama and McCain will do about that? From what I am hearing, anybody with less than 6 years seniority with the U.S. Postal Service may be in jeopardy of losing their job. At least no DPWN to blame in this case.
USPS News Release: Postal Service Reports Third Quarter Loss as Economic Slowdown Continues to Affect Mailing Industry
Postal Service Reports Third Quarter Loss as Economic Slowdown Continues to Affect Mailing Industry
On-Time Mail Delivery at Record High
WASHINGTON, DC — The U.S. Postal Service ended its third fiscal year quarter (April 1 – June 30) with a greater-than-expected net loss of $1.1 billion. The national economic slowdown reduced mail volume at an accelerated pace and continued inflation in fuel prices produced rapidly escalating transportation costs. Despite these financial challenges, Postal Service employees delivered record-breaking service performance in the third quarter.
For the third quarter ending June 30:
“When the economy does rebound, mail volume may not return to previous levels,” said Postmaster General John Potter. “This requires that we significantly accelerate process improvements and the realignment of resources in order to achieve long-term financial success. Failure to do so will threaten our ability to meet our mission of providing universal service at affordable prices.”
Record-Breaking Service Performance
In the third fiscal quarter, on-time delivery performance reached record highs for all three categories of First-Class Mail the Postal Service tracks. Overnight service was 97 percent on-time, up from 96 percent the same period last year. Two-day service was 95 percent on-time, up from 93 percent the same period last year. Three-day service was 94 percent on-time, up from 91 percent the same period last year.
“These outstanding results show the tremendous dedication of our employees to provide excellent customer service, especially as we continue to work with our unions to further reduce costs and increase efficiency,” said Potter.
The above quote means; We have hired consultants to evaluate the cost structure of the U.S. Postal Service. Possible cost savings include cancelling Saturday delivery of mail which will result in corresponding layoffs.
I wonder what Obama and McCain will do about that? From what I am hearing, anybody with less than 6 years seniority with the U.S. Postal Service may be in jeopardy of losing their job. At least no DPWN to blame in this case.
USPS News Release: Postal Service Reports Third Quarter Loss as Economic Slowdown Continues to Affect Mailing Industry
Postal Service Reports Third Quarter Loss as Economic Slowdown Continues to Affect Mailing Industry
On-Time Mail Delivery at Record High
WASHINGTON, DC — The U.S. Postal Service ended its third fiscal year quarter (April 1 – June 30) with a greater-than-expected net loss of $1.1 billion. The national economic slowdown reduced mail volume at an accelerated pace and continued inflation in fuel prices produced rapidly escalating transportation costs. Despite these financial challenges, Postal Service employees delivered record-breaking service performance in the third quarter.
For the third quarter ending June 30:
- Operating revenue was $17.9 billion, a decrease of $437 million, or 2.4 percent, compared to the same period last year.
- Operating expenses totaled $19.0 billion, an increase of only $178 million, or 1.0 percent, from the third quarter last year, despite substantial increases in fuel prices.
- Expenses include $1.4 billion of the $5.6 billion payment to the Postal Service Retiree Health Benefits Fund that the Postal Service is required to make by Sept. 30, 2008, under the Postal Accountability and Enhancement Act of 2006.
- Mail volume was 48.5 billion pieces, a 5.5 percent drop from the same period last year. First-Class Mail and Standard Mail volume were each down 5.5 percent in the third quarter, reflecting the challenging economic environment.
“When the economy does rebound, mail volume may not return to previous levels,” said Postmaster General John Potter. “This requires that we significantly accelerate process improvements and the realignment of resources in order to achieve long-term financial success. Failure to do so will threaten our ability to meet our mission of providing universal service at affordable prices.”
Record-Breaking Service Performance
In the third fiscal quarter, on-time delivery performance reached record highs for all three categories of First-Class Mail the Postal Service tracks. Overnight service was 97 percent on-time, up from 96 percent the same period last year. Two-day service was 95 percent on-time, up from 93 percent the same period last year. Three-day service was 94 percent on-time, up from 91 percent the same period last year.
“These outstanding results show the tremendous dedication of our employees to provide excellent customer service, especially as we continue to work with our unions to further reduce costs and increase efficiency,” said Potter.
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mistakenly reported???
UPS Garbles Delivery Of TNT Lines - Forbes.com
UPS Garbles Delivery Of TNT Lines
Lionel Laurent, 08.11.08, 3:35 PM ET
LONDON -
Shares of the Dutch mail company TNT had a very volatile Monday, after United Parcel Service's head of international operations was mistakenly reported to have poured cold water over hopes of a takeover bid.
Shares of TNT (other-otc: TNTTY - news - people ) closed down 1.0%, to 25.11 euros ($37.41), in Amsterdam, after initially rising on reports that it was in discussions with American rival UPS (nyse: UPS - news - people ). But according to TradeTheNews, the chief executive of UPS International said that buying a company would "devalue" its own shares.
A UPS spokesperson contested the quote, which first appeared in a Reuters report published at around midday. She would not say why or how the executive, Dan Brutto, had been misquoted; in any case, the dramatic 11.1% plunge in TNT shares during midday trading was all but recovered by market close.
Later, Reuters withdrew the article, saying it "accepts that the UPS executive was not commenting specifically on reports that TNT and UPS were in talks."
This is not the first time the Dutch firm has been linked to an American rival. TNT's stock had a particularly wild July, jumping 43.6% in two weeks, on rumors of interest from Federal Express (nyse: FDX - news - people ). TNT shares are now down 28.7% from their peak last year.
"From a fundamental view, TNT is worth more than 30.00 euros ($45.06) per share," said Phillip Scholte, analyst with Rabo Securities, adding that a takeover premium could push an offer into the territory of 41.00 to 42.00 euros ($61.59-$63.07) per share. That would value the company at around 15.0 billion euros ($22.5 billion) .
That price gap may be the very obstacle that prevents a deal with either TNT or FedEx, despite the strategic logic behind such a tie-up. Both UPS and FedEx issued quarterly profit warnings this summer, showing the two companies were struggling with record fuel costs and a significant downturn in the American economy.
Although TNT has strong European exposure and has resisted commodity prices better by focusing on road transport rather than air freight, it may not want to sell itself at a time when potential buyers are not looking to overspend on an acquisition. (See "FedEx's Face Saver.")
UPS Garbles Delivery Of TNT Lines
Lionel Laurent, 08.11.08, 3:35 PM ET
LONDON -
Shares of the Dutch mail company TNT had a very volatile Monday, after United Parcel Service's head of international operations was mistakenly reported to have poured cold water over hopes of a takeover bid.
Shares of TNT (other-otc: TNTTY - news - people ) closed down 1.0%, to 25.11 euros ($37.41), in Amsterdam, after initially rising on reports that it was in discussions with American rival UPS (nyse: UPS - news - people ). But according to TradeTheNews, the chief executive of UPS International said that buying a company would "devalue" its own shares.
A UPS spokesperson contested the quote, which first appeared in a Reuters report published at around midday. She would not say why or how the executive, Dan Brutto, had been misquoted; in any case, the dramatic 11.1% plunge in TNT shares during midday trading was all but recovered by market close.
Later, Reuters withdrew the article, saying it "accepts that the UPS executive was not commenting specifically on reports that TNT and UPS were in talks."
This is not the first time the Dutch firm has been linked to an American rival. TNT's stock had a particularly wild July, jumping 43.6% in two weeks, on rumors of interest from Federal Express (nyse: FDX - news - people ). TNT shares are now down 28.7% from their peak last year.
"From a fundamental view, TNT is worth more than 30.00 euros ($45.06) per share," said Phillip Scholte, analyst with Rabo Securities, adding that a takeover premium could push an offer into the territory of 41.00 to 42.00 euros ($61.59-$63.07) per share. That would value the company at around 15.0 billion euros ($22.5 billion) .
That price gap may be the very obstacle that prevents a deal with either TNT or FedEx, despite the strategic logic behind such a tie-up. Both UPS and FedEx issued quarterly profit warnings this summer, showing the two companies were struggling with record fuel costs and a significant downturn in the American economy.
Although TNT has strong European exposure and has resisted commodity prices better by focusing on road transport rather than air freight, it may not want to sell itself at a time when potential buyers are not looking to overspend on an acquisition. (See "FedEx's Face Saver.")
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As you say. There are several DOD flights that are brokered by Astar for DHL. This is fact. There may be some that are done by Kalitta as well.
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DHL Parent's Chief Defends UPS Deal
Yesterday, Ohio Lieutenant Gov. Lee Fisher said in an interview that the state wants to enter into "a risk-sharing, collaborative financial partnership" with the company, in place of the UPS deal.
Now that's insane! The state of Ohio now wants to enter into the express integrator business. That's what people in the rest of the world call socialism.
DHL Parent's Chief Defends UPS Deal - WSJ.com
DHL Parent's Chief Defends UPS Deal
By COREY DADE and ALEX ROTH
August 14, 2008; Page B4
Hoping to quell the furor building for congressional hearings into DHL's outsourcing deal with United Parcel Service Inc., the chief executive officer of DHL parent Deutsche Post AG of Germany defended the move as critical to saving the U.S. business and its 43,000 jobs.
Frank Appel, CEO of the Bonn-based delivery giant, in his first interview since the agreement became a political target of presidential candidates John McCain and Barack Obama, said the only alternative is "more serious cuts to the whole operation" to stanch losses of $5 million a day. "I can't afford to take losses of $1.3 billion forever," he said.
Mr. Appel expressed sympathy for the more than 8,000 workers expected to lose their jobs in the closure of DHL's Wilmington, Ohio air hub and said he plans to dispatch local advisers to help them find other jobs.
Concerns raised by Republican Sen. McCain and Democratic Sen. Obama are understandable given the hub's importance to the local economy, Mr. Appel said. However, he said there are no grounds for the candidates' demands for an antitrust investigation. "I can't imagine what would be the legal position" to block it, he said. UPS has sought to clarify the deal as a vendor contract rather than a merger, which would trigger a federal anticompetition review. If consummated, the contract would make DHL the largest customer of UPS and generate $1 billion in annual revenue for the Atlanta shipping titan.
A spokeswoman for the House Transportation and Infrastructure Committee said Wednesday that a hearing likely will be scheduled for September.
The Ohio congressional delegation first requested a hearing, and the committee chairman, Democratic Rep. James Oberstar of Minnesota, has expressed unease about the job losses and potential effects on customer service and industry competition.
Sen. McCain, along with Rep. Mike Turner, also a Republican, who represents the Wilmington area, on Tuesday sent a letter to Mr. Appel urging him to visit the city and "hear first hand the many important issues of concern to the affected community."
Mr. Appel in the interview said that wasn't necessary. "I should go there if I can tell people something, but we have said what we can say at the moment," Mr. Appel said.
Yesterday, Ohio Lieutenant Gov. Lee Fisher said in an interview that the state wants to enter into "a risk-sharing, collaborative financial partnership" with the company, in place of the UPS deal. Mr. Fisher declined to disclose details of the proposal.
Deutsche Post AG spokesman Silje Skogstad said, "We are not aware of such a proposal."
Last week Sen. McCain met with DHL workers in Wilmington and pledged to try to stop DHL from slashing jobs. Sen. Obama voiced similar concerns in asking the White House to step in.
DHL announced the UPS deal in May as part of a downsizing of its expansion in the U.S., which has failed over the past five years to gain market share against UPS and FedEx Corp. DHL bought express-delivery company Airborne Inc. in 2003 for $1.05 billion. At the time, members of Congress questioned a foreign company buying the cargo airline, in light of the Sept. 11 terror attacks and a U.S. law preventing foreign investors from holding a majority stake in a U.S. carrier.
DHL's Wolfgang Pordzik, executive vice president of corporate public policy, in an interview disputed recent news reports about the work of former Washington lobbyist Rick Davis on the acquisition. Mr. Pordzik said Mr. Davis, who is currently Sen. McCain's campaign manager, represented Airborne before the acquisition and wasn't hired by DHL until after the purchase was completed. Mr. Pordzik said Mr. Davis's role for DHL was to "basically create good will" for DHL on Capitol Hill "without a specific legislative target...or regulatory target."
Lobbyist disclosures filed with the Senate and a McCain campaign spokesman say Mr. Davis's firm, Davis Manafort Inc., worked on behalf of Airborne to push through its sale to DHL. The campaign and the documents also say DHL hired Manafort after the acquisition. Mr. Davis declined to comment.
An Obama campaign ad airing in the Wilmington area says Mr. Davis and Sen. McCain helped "foreign-owned DHL buy a U.S. company and gain control over the jobs that are now on the chopping block in Ohio." The McCain spokesman, Brian Rogers, said the Obama ad is "absolutely wrong" as far as Sen. McCain's role in the 2003 acquisition. Mr. Rogers says the senator never took a position on the deal, but opposed an amendment to a military spending bill aimed at prohibiting foreign airlines from carrying U.S. military troops and equipment. DHL at the time had such a contract.
Obama campaign spokesman Nick Shapiro said the ad's claims are "factually accurate."
Write to Corey Dade at [email protected]1 and Alex Roth at [email protected]2
URL for this article:
http://online.wsj.com/article/SB121866443949538367.html
Hyperlinks in this Article:
(1) mailto:[email protected]
(2) mailto:[email protected]
Now that's insane! The state of Ohio now wants to enter into the express integrator business. That's what people in the rest of the world call socialism.
DHL Parent's Chief Defends UPS Deal - WSJ.com
DHL Parent's Chief Defends UPS Deal
By COREY DADE and ALEX ROTH
August 14, 2008; Page B4
Hoping to quell the furor building for congressional hearings into DHL's outsourcing deal with United Parcel Service Inc., the chief executive officer of DHL parent Deutsche Post AG of Germany defended the move as critical to saving the U.S. business and its 43,000 jobs.
Frank Appel, CEO of the Bonn-based delivery giant, in his first interview since the agreement became a political target of presidential candidates John McCain and Barack Obama, said the only alternative is "more serious cuts to the whole operation" to stanch losses of $5 million a day. "I can't afford to take losses of $1.3 billion forever," he said.
Mr. Appel expressed sympathy for the more than 8,000 workers expected to lose their jobs in the closure of DHL's Wilmington, Ohio air hub and said he plans to dispatch local advisers to help them find other jobs.
Concerns raised by Republican Sen. McCain and Democratic Sen. Obama are understandable given the hub's importance to the local economy, Mr. Appel said. However, he said there are no grounds for the candidates' demands for an antitrust investigation. "I can't imagine what would be the legal position" to block it, he said. UPS has sought to clarify the deal as a vendor contract rather than a merger, which would trigger a federal anticompetition review. If consummated, the contract would make DHL the largest customer of UPS and generate $1 billion in annual revenue for the Atlanta shipping titan.
A spokeswoman for the House Transportation and Infrastructure Committee said Wednesday that a hearing likely will be scheduled for September.
The Ohio congressional delegation first requested a hearing, and the committee chairman, Democratic Rep. James Oberstar of Minnesota, has expressed unease about the job losses and potential effects on customer service and industry competition.
Sen. McCain, along with Rep. Mike Turner, also a Republican, who represents the Wilmington area, on Tuesday sent a letter to Mr. Appel urging him to visit the city and "hear first hand the many important issues of concern to the affected community."
Mr. Appel in the interview said that wasn't necessary. "I should go there if I can tell people something, but we have said what we can say at the moment," Mr. Appel said.
Yesterday, Ohio Lieutenant Gov. Lee Fisher said in an interview that the state wants to enter into "a risk-sharing, collaborative financial partnership" with the company, in place of the UPS deal. Mr. Fisher declined to disclose details of the proposal.
Deutsche Post AG spokesman Silje Skogstad said, "We are not aware of such a proposal."
Last week Sen. McCain met with DHL workers in Wilmington and pledged to try to stop DHL from slashing jobs. Sen. Obama voiced similar concerns in asking the White House to step in.
DHL announced the UPS deal in May as part of a downsizing of its expansion in the U.S., which has failed over the past five years to gain market share against UPS and FedEx Corp. DHL bought express-delivery company Airborne Inc. in 2003 for $1.05 billion. At the time, members of Congress questioned a foreign company buying the cargo airline, in light of the Sept. 11 terror attacks and a U.S. law preventing foreign investors from holding a majority stake in a U.S. carrier.
DHL's Wolfgang Pordzik, executive vice president of corporate public policy, in an interview disputed recent news reports about the work of former Washington lobbyist Rick Davis on the acquisition. Mr. Pordzik said Mr. Davis, who is currently Sen. McCain's campaign manager, represented Airborne before the acquisition and wasn't hired by DHL until after the purchase was completed. Mr. Pordzik said Mr. Davis's role for DHL was to "basically create good will" for DHL on Capitol Hill "without a specific legislative target...or regulatory target."
Lobbyist disclosures filed with the Senate and a McCain campaign spokesman say Mr. Davis's firm, Davis Manafort Inc., worked on behalf of Airborne to push through its sale to DHL. The campaign and the documents also say DHL hired Manafort after the acquisition. Mr. Davis declined to comment.
An Obama campaign ad airing in the Wilmington area says Mr. Davis and Sen. McCain helped "foreign-owned DHL buy a U.S. company and gain control over the jobs that are now on the chopping block in Ohio." The McCain spokesman, Brian Rogers, said the Obama ad is "absolutely wrong" as far as Sen. McCain's role in the 2003 acquisition. Mr. Rogers says the senator never took a position on the deal, but opposed an amendment to a military spending bill aimed at prohibiting foreign airlines from carrying U.S. military troops and equipment. DHL at the time had such a contract.
Obama campaign spokesman Nick Shapiro said the ad's claims are "factually accurate."
Write to Corey Dade at [email protected]1 and Alex Roth at [email protected]2
URL for this article:
http://online.wsj.com/article/SB121866443949538367.html
Hyperlinks in this Article:
(1) mailto:[email protected]
(2) mailto:[email protected]
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EU rejects 500 mln euros state aid for DHL Leipzig
I guess the state of Ohio missed this story?
UPDATE 1-EU rejects 500 mln euros state aid for DHL Leipzig | Industries | Industrials, Materials & Utilities | Reuters
UPDATE 1-EU rejects 500 mln euros state aid for DHL Leipzig
Wed Jul 23, 2008 8:36am EDT
BRUSSELS, July 23 (Reuters) - The European Commission has rejected German state aid guarantees for express cargo carrier DHL [DHL.UL] worth up to 500 million euros ($796.1 million) at Leipzig airport, it said on Wednesday.
The Commission did, however, authorise 350 million euros of public investment for a new runway at Leipzig Halle airport.
DHL, owned by Deutsche Post (DPWGn.DE: Quote, Profile, Research, Stock Buzz), said it welcomed the decision on the contribution to the new runway and had very little concern about the decision on the guarantees.
"CEO Frank Appel emphasized that Deutsche Post can live quite well with the commission's decision today," DHL said.
"We have obtained in the meantime the long-term security that DHL urgently needs at the Leipzig location," the statement quoted Appel as saying.
DHL said that it expected "no consequence whatsoever on the operational day-to-day business nor on DHL's decision to operate the central European hub in Leipzig for the long term."
A Commission spokesman said that the most DHL would have to reimburse for having received nine months of the guarantee would be less than 1 million euros.
Germany's federal state of Saxony had issued a so-called "comfort letter" promising Leipzig Airport and DHL up to 500 million euros if Leipzig airport was unable to meet conditions of a deal with DHL.
"The Commission concluded that the unlimited guarantee allowed DHL to hedge business risks on terms which a private investor would not have accepted and would distort competition," the Commission said in a statement.
The Commission said DHL has already benefited from the maximum amount of investment aid permissible for regions with an abnormally low standard of living and high unemployment.
UPDATE 1-EU rejects 500 mln euros state aid for DHL Leipzig | Industries | Industrials, Materials & Utilities | Reuters
UPDATE 1-EU rejects 500 mln euros state aid for DHL Leipzig
Wed Jul 23, 2008 8:36am EDT
BRUSSELS, July 23 (Reuters) - The European Commission has rejected German state aid guarantees for express cargo carrier DHL [DHL.UL] worth up to 500 million euros ($796.1 million) at Leipzig airport, it said on Wednesday.
The Commission did, however, authorise 350 million euros of public investment for a new runway at Leipzig Halle airport.
DHL, owned by Deutsche Post (DPWGn.DE: Quote, Profile, Research, Stock Buzz), said it welcomed the decision on the contribution to the new runway and had very little concern about the decision on the guarantees.
"CEO Frank Appel emphasized that Deutsche Post can live quite well with the commission's decision today," DHL said.
"We have obtained in the meantime the long-term security that DHL urgently needs at the Leipzig location," the statement quoted Appel as saying.
DHL said that it expected "no consequence whatsoever on the operational day-to-day business nor on DHL's decision to operate the central European hub in Leipzig for the long term."
A Commission spokesman said that the most DHL would have to reimburse for having received nine months of the guarantee would be less than 1 million euros.
Germany's federal state of Saxony had issued a so-called "comfort letter" promising Leipzig Airport and DHL up to 500 million euros if Leipzig airport was unable to meet conditions of a deal with DHL.
"The Commission concluded that the unlimited guarantee allowed DHL to hedge business risks on terms which a private investor would not have accepted and would distort competition," the Commission said in a statement.
The Commission said DHL has already benefited from the maximum amount of investment aid permissible for regions with an abnormally low standard of living and high unemployment.
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DHL fails to deliver the goods - Ohio's courier draws complaints
.....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."
To reach this Plain Dealer reporter:
[email protected], 1-800-228-8272
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."
To reach this Plain Dealer reporter:
[email protected], 1-800-228-8272
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Customers are downgrading their service expectations, from air to ground.
http://www.nytimes.com/2008/08/16/bu...f=sloginAugust 16, 2008Saturday InterviewFor Deliveries, Speed Not Quite of the EssenceBy ELIZABETH OLSONHIGH fuel prices and a sluggish economy have taken a toll on overnight delivery services, forcing some significant shifts in how the biggest operators do business. DHL Express, the country’s third-biggest overnight deliverer, recently hired a rival, United Parcel Service, to handle its air cargo operations in the United States. While its global business is profitable, the American segment of DHL, acquired in 2002 by Deutsche Post of Germany, is expected to lose $1.3 billion this year. In an interview from DHL’s American headquarters in Plantation, Fla., its chief executive, John P. Mullen, discussed the deal with U.P.S.Q. What factors drove you to make a deal with U.P.S.?A. The cost of maintaining our network in the United States has been very painful to us, and it’s been exacerbated by the increasing fuel costs. Under the arrangement with U.P.S., if our volume should continue to fall, our costs fall with it. And we have 110 aircraft in the United States, a lot of which are quite old and will need replacement in the coming years. So we avoid that capital expenditure. Q. What kind of impact have fuel costs had?A. Very considerable. First, the straight cost burden, and our fuel surcharge does not cover all of it. But more importantly, it starts changing a customer’s behavior. When you say there’s a surcharge of 5 percent or 10 percent, they read the newspapers and they know fuel is going up. But when you start talking 30 percent and up, which is what we’ve got at the moment, the customer starts saying: “Well, do I really need the package there tomorrow morning at 10:30?” Q. Has that translated into less demand for air service?A. We’re seeing that customers are downgrading their service expectations, from air to ground. And once customers change, it’s pretty hard to get them to come back again. And even if fuel prices were to come down significantly, we’re not sure customers would revert to urgent air express. Our whole industry is going to have to adjust because, while it may not be tomorrow, we’re going to see huge amounts of our revenue migrate to ground and other forms of transport.Q. By outsourcing your air cargo services to a rival, where does that leave the company? What is the business model now — more ground and less air?A. Our business model hasn’t changed. We’re still picking up the package, we’re still delivering it. But instead of giving it to one operator who is flying just for us, we’re giving it to U.P.S., which, although it is a competitor, is just a service provider. The customers wouldn’t actually know whether we used U.P.S. or someone else for the air segment.Q. What was the price of this deal?A. U.P.S. will charge us about a billion dollars a year to move our material. Our savings, taking into account other restructuring, including closing 30 percent of our ground stations in the United States, will save us about a billion dollars a year.Q. How many jobs will you be cutting?A. We’re cutting 1,500 to 1,800 of our own employees, including some at our air hub in Wilmington, Ohio. And these changes will have an impact on our suppliers, which will mean several thousand more jobs will be affected. Our cuts will come in smaller towns, and we’ll close stations where there are several in the same area.Q. What percentage of your business will be affected by these changes?A. We’re estimating that these changes, while they sound fairly large, will only have an impact on about 4 percent of our shipments. In other words, 4 percent of our shipments will go from early morning delivery to maybe afternoon delivery. We’ll still be delivering them, but they will be slightly slower than before, but only a small percent.Q. How does this affect the general landscape in the United States for deliveries?A. It shouldn’t make any appreciable difference, and while the deal should make us both more productive, we remain full-tilt competitors. In the rest of the world, in Europe, Asia and emerging economies — where we are in a much stronger position — we are trying to make life as difficult as possible for them.Q. How much of a decline in daily package volume have you seen because of the economy slumping?A. Some customers are not sending altogether. But most are trying to find a cheaper way, such as sending it by ground. We’ve got the double impact right now of fuel costs and the economic recession because we carry an awful lot of mortgage documents, contracts and so on, and that side of our business is very significantly under pressure. Air express overnight volumes in the industry are down anywhere from 5 percent to 15 percent from this time last year. Q. When will the new arrangement go into effect?A. We hope to have a completed agreement with U.P.S. in a couple of months, and we would start to migrate volume across. We would like to see it all in place by mid- to late 2009. But at the end of the year, our busiest season since stores and other parts of industry are ramping up, we will slacken off and try not to make too many changes until the new year.
Last edited by Rock_On; 17th Aug 2008 at 00:44.
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They (politicians) are stopping short of getting into taking sides...
http://www.ajc.com/business/content/...ongress.htmlAs UPS, DHL pursue a deal, Congress gets involvedBy RACHEL TOBIN RAMOSThe Atlanta Journal-ConstitutionA proposed deal for UPS to carry air cargo for DHL has taken the national stage. Both presidential candidates have seized on the issue because the deal could put thousands of Ohio workers and pilots out of jobs.In an August radio ad, run in Ohio, Democratic candidate Barack Obama accused Republican candidate John McCain’s campaign manager of lobbying to help Deutsch Post World Net, the German parent company of DHL, buy the Wilmington, Ohio, air hub that it now plans to close.McCain responded by meeting with two dozen Wilmington community leaders and calling for a federal probe of the pending UPS/DHL deal. Meanwhile, the White House appointed a liaison to monitor the proposed deal, and two congressmen vowed to hold hearings in September.“It is a presidential election, so you will see some efforts to make noise in the media that the political campaigns are paying attention to,” said crisis management consultant Eric Dezenhall, CEO of Dezenhall Resources in Washington and author of “Damage Control.”Currently, lawyers at Sandy Springs-based UPS are talking to lawyers for DHL in Plantation, Fla., its U.S. headquarters. DHL’s world headquarters are in Belgium.The two carriers want to strike a deal to let UPS fly DHL’s air cargo inside North America. The deal is not a merger, which would require approval from federal regulators. DHL and UPS are saying it’s a contract, similar to how UPS and FedEx fly air cargo for the United States Postal Service.But pilots who fly for DHL, and stand to lose their jobs, as well as the entire Ohio congressional delegation, are clamoring for extra scrutiny. The pilots have sued DHL, and congressional leaders are turning up the heat in Washington. The groups say that having two competitors work so closely together will violate antitrust laws.The contract would make DHL the largest customer for UPS, adding about $1 billion a year to UPS’ revenue.Dezenhall said scrutinizing the issue is a pretty safe bet for the politicians.In political science, he said, it’s called a “valance issue,” or an issue that 100 percent of the population can agree on.“By coming out and saying, ‘I’m concerned about this,’ they’ve weighed in and tipped their hat to Ohio voters, showing they’re paying attention. But they’re stopping short of getting into taking sides because they don’t know where the ball is bouncing. Nobody gets hurt that way.”U.S. Sen. Johnny Isakson (R-Ga.) said he understands his congressional colleagues’ urge to look into the issue. “Any time we have a situation where the country is having economically difficult times and a presidential race going on,” he said, “and a business transaction taking place that affects jobs, obviously it gets more attention than it might otherwise get.”Said Isakson: “Congress has the ability to look into anything it wants to look into.”So far, he said, no one from UPS has lobbied him to support the deal, although he knows several UPS lobbyists. He said he frequently talks to them about energy issues. (In the last quarter, UPS’ fuel bill rose 67.4 percent to $1.17 billion, from $697 million the same period a year ago.) Isakson and U.S. Sen. Saxby Chambliss (R-Ga.) recently introduced an energy bill.Isakson doesn’t believe the DHL/UPS contract will require federal regulatory oversight.UPS spokesman Norman Black said the company will cooperate with any congressional inquiries. One hearing has been set for Sept. 16.“If we are asked to testify at these hearings,” he said, “we’ll be more than happy to do so. We do not fear in any way this scrutiny, because any objective look at the proposed deal — remember, it’s not done — will demonstrate that it does not raise any antitrust issues.”He expressed frustration at people who believe they can force DHL to keep its Wilmington hub open. “I’ve seen some people suggest you can somehow order DHL to keep suffering these losses and keep jobs in place.”DHL officials could not be reached for comment.In May, DHL said that by outsourcing to UPS, its U.S. operations will save about $1 billion per year.The news came about four years after DHL made a heavy push to carve into rivals FedEx and UPS’ U.S. territory. DHL is a stronger force internationally.In 2004, DHL announced it would spend $1.2 billion to build more infrastructure here, and the company secured a commitment for $422 million in incentives from the state of Ohio to improve the Wilmington air hub, which DHL owns.The air hub is the crux of the problem in Ohio. It handles only DHL flights, and the hub, which employs thousands of workers, would close under the proposed deal.The interest from Washington hasn’t slowed the deal’s progress, said UPS’ Black. UPS executives have said they are working to finalize the DHL contract this fall, or by the end of the year at the latest.Ed Wolfe, a freight analyst in New York with Wolfe Research, had a different conclusion. He wrote in a note to clients on Aug. 11, “Last week, two senators asked regulators to look into potential implications of a proposed 10-year line-haul agreement between UPS and DHL. Our sense is that federal scrutiny could delay the process further, although we still expect eventual completion.”
Ups Tay ?
Do you mean TNT (in Europe)?? Those rumours are old....
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Deutsche Post CEO Says There Were Simply No Other Options
Transportation News: As Politicians Turn Up the Heat on Planned DHL Hub Closing, Deutsche Post CEO Says There Were Simply No Other Options
T
Supply Chain Digest
August 18, 2008
Copyright 2008
As Politicians Turn Up the Heat on Planned DHL Hub Closing,
Deutsche Post CEO Says There Were Simply No Other Options
Losing $5 Million a Day Can’t Go On Forever; State of Ohio Offers Vague Partnership
Possibility to Save Wilmington Hub
SCDigest Editorial Staff
August 18, 2008
Copyright 2008
As Politicians Turn Up the Heat on Planned DHL Hub Closing,
Deutsche Post CEO Says There Were Simply No Other Options
Losing $5 Million a Day Can’t Go On Forever; State of Ohio Offers Vague Partnership
Possibility to Save Wilmington Hub
SCDigest Editorial Staff
T
he drama continues in DHL’s announced change
in its North American strategy, which includes outsourcing
its airlift operations to UPS and closure of
its large sortation hub in Wilmington, OH. That operation
employs more than 6000 workers directly
and several thousand more that work in other companies
that use or support the hub. The outsourcing
to UPS would move the air operations of DHL from
Ohio to UPS’ massive Louisville, KY hub.
Supported by politicians on both sides of the aisle
and presidential candidate John McCain, the US Congress
plans hearings in September on the proposed
deal and how it might impact parcel shipping markets
here. The stated concern revolves around the
potential to reduce competition in the express shipping
industry and other anti-trust concerns. However,
DHL says it plans to sell and market its services
in competition with UPS under the deal, dismissing
charges it will reduce market competition.
Regardless, it seems clear the closure of the Wilmington
hub and related job losses are the real drivers
of political concern.
“This deal, if allowed to be completed, would have
consequences beyond its devastating impact on our
local, state and national economy,” said Mike
Turner, an Ohio congressman in Dayton whose dist
r i c t i n c l u d e s W i l m i n g t o n .
The planned hearings in fact come before DHL and
UPS have even worked out a deal on the outsourcing
relationship. At one point, DHL had said it hoped to
have an agreement with UPS by the end of July, but
now entering the third week of August the deal has
still not been completed. Some observers have questioned
the strategy of announcing the outsourcing
plans before the UPS deal was done, which may
give UPS an advantage in the negotiations.
“Can’t Afford to Take $1.3 Billion
Losses Forever”
Meanwhile,
its airlift operations to UPS and closure of
its large sortation hub in Wilmington, OH. That operation
employs more than 6000 workers directly
and several thousand more that work in other companies
that use or support the hub. The outsourcing
to UPS would move the air operations of DHL from
Ohio to UPS’ massive Louisville, KY hub.
Supported by politicians on both sides of the aisle
and presidential candidate John McCain, the US Congress
plans hearings in September on the proposed
deal and how it might impact parcel shipping markets
here. The stated concern revolves around the
potential to reduce competition in the express shipping
industry and other anti-trust concerns. However,
DHL says it plans to sell and market its services
in competition with UPS under the deal, dismissing
charges it will reduce market competition.
Regardless, it seems clear the closure of the Wilmington
hub and related job losses are the real drivers
of political concern.
“This deal, if allowed to be completed, would have
consequences beyond its devastating impact on our
local, state and national economy,” said Mike
Turner, an Ohio congressman in Dayton whose dist
r i c t i n c l u d e s W i l m i n g t o n .
The planned hearings in fact come before DHL and
UPS have even worked out a deal on the outsourcing
relationship. At one point, DHL had said it hoped to
have an agreement with UPS by the end of July, but
now entering the third week of August the deal has
still not been completed. Some observers have questioned
the strategy of announcing the outsourcing
plans before the UPS deal was done, which may
give UPS an advantage in the negotiations.
“Can’t Afford to Take $1.3 Billion
Losses Forever”
Meanwhile,
Frank Appel, CEO of DHL parent
Deutsche Post, finally commented about the DHL
controversy, after having been largely silent until
now. He defended the move to outsource to UPS
(and other announced changes) as necessary to
enable DHL to remain in the US market and save
tens of thousands of other jobs there.
He also wonders what the US Congressional actions
can really achieve – given the alternative for
DHL is to shut down its North American operations
completely. Appel said the company was losing $5
million per day in North America.
“I can’t afford to take losses of $1.3 billion
[annually] forever,” he stated.
The only real, albeit remote, possibility
would be for some very large
group of private equity investors to
buy back the operations and try to
reconstitute the old Airborne Express
in some fashion, but the financial and
market realities of that idea are very
forbidding.
Supply Chain Digest
August 18, 2008
Copyright 2008
As Politicians Turn Up the Heat on Planned DHL Hub Closing, Deutsche Post CEO Says
There Were Simply No Other Options (Con’t)
According to a Wall Street Journal story, Appel
said he has resisted calls for him to visit the Wilmington
area, as he had nothing new he could
tell the workers and community there.
“Nevertheless, I think it’s important to tell the
people that I understand that it’s a hardship for
them,” Appel said.
To further add to the drama, Ohio Lieutenant
Governor Lee Fisher said last week that the
state was interested in potentially jumping in to
save the Wilmington hub and jobs.
Fisher said the state of Ohio might be willing to
craft “a risk-sharing, collaborative financial partnership”
with DHL to eliminate the need for it to
outsource to UPS. Details of this idea, however,
were very limited.
Finally, Ohio Senator Sherrod Brown wrote a
letter this week to the Bush administration asking
it to consider what has happened with DHL
as it negotiates with the Europe Union on the so
-called Open Skies agreement that would ease
restrictions on a variety of international air
transportation operations. Stage II of the Open
Skies agreement is currently under discussion.
In the letter, Brown noted what DHL said when
it received approval to acquire US-based Airborne
Express in 2003: “DHL said the transaction
would: 1) increase profitability and market
share for both companies; and 2) enhance free
market competition by creating a new entrant into
an express delivery market dominated by two major
carriers: UPS and FedEx,” Brown wrote.
“Unfortunately, that has not been the experience of
DHL in the U.S. market.”
Said SCDigest editor Dan Gilmore: “Unfortunately,
no matter what management mistakes got the company
into this position, nothing anyone does can
change the fact that DHL is losing huge amounts of
money in the US market. No law or ruling can force
them to continue to do that indefinitely.”
He added, “The only real, albeit remote, possibility
would be for some very large group of private equity
investors to buy back the operations and try to
reconstitute the old Airborne Express in some fashion,
but the financial and market realities of that
idea are very forbidding.”controversy, after having been largely silent until
now. He defended the move to outsource to UPS
(and other announced changes) as necessary to
enable DHL to remain in the US market and save
tens of thousands of other jobs there.
He also wonders what the US Congressional actions
can really achieve – given the alternative for
DHL is to shut down its North American operations
completely. Appel said the company was losing $5
million per day in North America.
“I can’t afford to take losses of $1.3 billion
[annually] forever,” he stated.
The only real, albeit remote, possibility
would be for some very large
group of private equity investors to
buy back the operations and try to
reconstitute the old Airborne Express
in some fashion, but the financial and
market realities of that idea are very
forbidding.
Supply Chain Digest
August 18, 2008
Copyright 2008
As Politicians Turn Up the Heat on Planned DHL Hub Closing, Deutsche Post CEO Says
There Were Simply No Other Options (Con’t)
According to a Wall Street Journal story, Appel
said he has resisted calls for him to visit the Wilmington
area, as he had nothing new he could
tell the workers and community there.
“Nevertheless, I think it’s important to tell the
people that I understand that it’s a hardship for
them,” Appel said.
To further add to the drama, Ohio Lieutenant
Governor Lee Fisher said last week that the
state was interested in potentially jumping in to
save the Wilmington hub and jobs.
Fisher said the state of Ohio might be willing to
craft “a risk-sharing, collaborative financial partnership”
with DHL to eliminate the need for it to
outsource to UPS. Details of this idea, however,
were very limited.
Finally, Ohio Senator Sherrod Brown wrote a
letter this week to the Bush administration asking
it to consider what has happened with DHL
as it negotiates with the Europe Union on the so
-called Open Skies agreement that would ease
restrictions on a variety of international air
transportation operations. Stage II of the Open
Skies agreement is currently under discussion.
In the letter, Brown noted what DHL said when
it received approval to acquire US-based Airborne
Express in 2003: “DHL said the transaction
would: 1) increase profitability and market
share for both companies; and 2) enhance free
market competition by creating a new entrant into
an express delivery market dominated by two major
carriers: UPS and FedEx,” Brown wrote.
“Unfortunately, that has not been the experience of
DHL in the U.S. market.”
Said SCDigest editor Dan Gilmore: “Unfortunately,
no matter what management mistakes got the company
into this position, nothing anyone does can
change the fact that DHL is losing huge amounts of
money in the US market. No law or ruling can force
them to continue to do that indefinitely.”
He added, “The only real, albeit remote, possibility
would be for some very large group of private equity
investors to buy back the operations and try to
reconstitute the old Airborne Express in some fashion,
but the financial and market realities of that
Top Dog
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Post a link or a quote if it helps the discussion; This endless copy/pasting is not what PPRuNe is about.
Thank you. (And thanks for your patience with this site being so slooooooow)
Thank you. (And thanks for your patience with this site being so slooooooow)
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Reply to Hvydriver:
Actually, the US route authority ends well before DHL Bahrain. Kalitta moves the cargo to BAH. DHL is contracted to Kalitta (not to the USPS) to move the cargo to Iraq/Afghanistan. US route authority is not valid in ops done completely in a foreign country, which Bahrain-Iraq obviously is. As has already been stated: Astar has NOTHING to do with this contract or operation.
Actually, the US route authority ends well before DHL Bahrain. Kalitta moves the cargo to BAH. DHL is contracted to Kalitta (not to the USPS) to move the cargo to Iraq/Afghanistan. US route authority is not valid in ops done completely in a foreign country, which Bahrain-Iraq obviously is. As has already been stated: Astar has NOTHING to do with this contract or operation.
Last edited by org; 27th Aug 2008 at 06:42. Reason: clarification
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CR2 Yep it's all garbage and if there's anything worthwhile reading it's hidden away somwhere in the post (and the colours are crap).
Can't you change the title to Rock On.....
Can't you change the title to Rock On.....
They're safe as houses.... plenty of flying for DHL in Europe - they have market dominance there.