Deutsche Post World Net takes strong action to reduce U.S. Express loss

DHL Express to focus on international competencies in the U.S. and exit U.S. domestic air and ground business.

The international express offering in the U.S. will be maintained and the region will remain an integral part of DHL’s global Express network. Deutsche Post World Net also plans to accelerate its Roadmap to Value measures aimed at improving profitability throughout the Group by reducing operating and non-operating expenses in order to prepare the company for the economic challenges ahead.
The Group also reported results for the first nine months of the year. Nine-month underlying EBIT from continuing operations rose 1.3 percent to 1.6 billion euros, with revenue in the period increasing by 2.3 percent to 40.5 billion euros. About 70 percent of revenue in the first nine months was generated outside of Germany.
In order to minimize future uncertainties at its DHL U.S. Express business to a minimum, the Group will discontinue U.S. domestic-only air and ground products on January 30 to focus entirely on its international offering. Annual operating costs at DHL U.S. Express will be reduced from the current USD 5.4 billion (4.2 billion euros) to less than USD 1 billion (770 million euros). In order to reach this target, DHL U.S. Express will close all ground hubs and reduce the number of stations from 412 to 103.
A total of 9,500 jobs at DHL Express in the U.S. will be cut as a result of the measures on top of the approximately 5,400 positions already reduced since the beginning of the year. The Group expects to spend an additional USD 1.9 billion (1.5 billion euros) on the restructuring, bringing the total Group costs to USD 3.9 billion (3 billion euros) over two years, the majority of which will be booked in 2008.