DHL sign air freight agreement with USPS and FedEx
DHL signed a major ground and air freight agreement with the United States Postal Service and its principal air express operator, FedEx.
Deutsche Post World Net plans to announce details of the agreement via webcast from Bonn.
The agreement calls for FedEx to carry some air and ground freight on behalf of the USPS. Sources familiar with the agreement said FedEx will takeover those unprofitable air routes initially and increase the service gradually.
DPWN Chief Executive Officer Frank Appel is also expected to announce the closing of a quarter of DHL’s U.S. stations and the elimination of hundreds of jobs. DHL is expected to redirect its growth efforts on its international service.
FedEx and DHL declined to comment and the USPS was non-committal about the venture.
“We understand DHL is holding a news conference in Germany, and any news regarding DHL will come from that conference,” said USPS spokesman Mark Saunders. “We have nothing to add.” The agreement could further solidify the relationship between FedEx and USPS and mark the beginning of the end of DHL’s direct involvement in U.S. Express operations, industry experts say.
“This looks like an admission that breaking into the U.S. domestic market stronghold was not something DHL could accomplish on its own,” said George Hamlin, managing director of ACA Associates, an airline consultancy.
In January 2001, FedEx and the Postal Service announced two major agreements. One called for FedEx Express to provide airport-to-airport movement of containers holding around 3.5 million pounds of Priority Mail, Express Mail and First Class Mail. The other part of the agreement involved the drop off of packages at FedEx Drop Boxes nationwide. At that time, the venture was expected to generate approximately $1 billion a year for FedEx.
The USPS declined to say how much it pays FedEx annually.
