Deutsche Post experiences problems with integration of US activities of DHL

Deutsche Post, the German postal service operator, has experienced problems with the integration of the US activities of DHL, its express and logistics subsidiary, after reducing the number of hubs it uses for its air freight operations in the US from two to one. This led to a delay in some deliveries, as a result of which the company lost customers and registered a drop in turnover in September and October. The company says that the drop in turnover totalled $280m, which corresponds to 5 to 6 per cent of its overall turnover in the US.

DHL says that it has since compensated for this setback, although it took until mid-October to return to the same level of service as before the integration of these activities. The company, which is aiming to break even in the US by the end of next year, says that the financial impact of these problems will not change its long-term financial goals. For the first nine months of this year, the loss before interest and tax in the US totalled 264m euros, compared with 436m euros for the same period of last year. DHL is anticipating annual growth rates of 35 to 45 per cent in China over the next few years, which means the company will be growing faster than the market.

Abstracted from Handelsblatt

Deutsche Post’s DHL lost 240-280 mln usd in sales because of delays at US centre
AFX UK Focus 11-28-2005
BONN (AFX) – Deutsche Post AG said its DHL unit lost 240-280 mln usd in revenue because of delays in opening its Wilmington, Ohio distribution centre.

DHL’s vice-president of commercial operations, John Pearson, said during the company’s Capital Markets Day that it lost some clients because of delays at the centre.

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