Deutsche Post sees DHL breaking even in U.S. in 2-3 years
German mail and logistics firm Deutsche Post expects its DHL Express business in the United States to break even in two to three years as it takes on larger U.S. rivals UPS and FedEx.
The company wants to achieve a return on sales of 3 to 5 percent at the U.S. business in the mid to long term, DHL Express head John Mullen said at a capital markets day in New York on Tuesday.
“The United States is a long, hard road,” Mullen said. “I think we are making good progress. At the moment, our focus is clearly to break even.”
The company had previously said it did not expect DHL Express to break even in the U.S. before 2009.
Shares in Deutsche Post rose 3.6 percent to 23.35 euros following Mullen’s comments, making them the second-best performers on the German DAX index.
Deutsche Post is struggling with losses at DHL Express in the United States as it tries to boost its presence in a market dominated by FedEx and UPS. Deutsche Post has expanded into new markets, in particular through its DHL logistics and express delivery divisions, as it prepares to lose its domestic mail monopoly.
Mullen said the 3 to 5 percent return-on-sales target for DHL Express in the United States was “hardly on the radar screen,” but added: “It’s there as an aspirational goal.”
The company is aiming to achieve an eventual return on sales of 10 percent across DHL Express worldwide.
