UPS & DHL continue talks

UPS Inc.’s talks with DHL about carrying some of its air packages have gone into overtime, raising questions about whether a deal will ultimately be struck. When the talks were announced last May, DHL said it expected to finalize a contract by the end of 2008. Three weeks into 2009, the parties continue to talk, but with a new wrinkle in the mix.

DHL no longer will offer U.S. domestic-only air and ground services as of Jan. 30, though it has said international shipping to and from the U.S. would continue. The move, announced in November, could greatly scale back the possible venture between UPS and DHL, the fourth-largest shipper of packages in the U.S.

Currently, DHL’s total air volume for shipments from points between U.S. and international destinations and between points within the U.S. is about 1.2 million shipments a day. That figure will drop to about 100,000 shipments a day after the changes go through, DHL’s parent has said. The air volume figures do not include packages that do not start or end in the U.S.

“It is certainly true that DHL had originally said they hoped and expected to finish a contract before the end of the year, but of course then they announced their withdrawal from the U.S. market and the talks had to start again on a different type of contract,” UPS spokesman Norman Black said Tuesday.