Tag: Courier/Express/Parcels

Presentation by Frank Appel on DHL U.S. Express Restructure Plans

Posted by | May 28, 2008 | |

Deutsche Post World Net unveiled a plan to restructure its DHL U.S. Express business. The plan will lead to sustainable improvements in financial performance and provide a sound starting point for a more efficient and customer-oriented business in the future. Under the plan, DHL U.S. Express will redesign the network to better match capacity with customer requirements and partner with UPS for airlift capacity on domestic and international Express products in North America. DPWN Chief Executive Officer Frank Appel presents the rationale behind the plan and the anticipated improvements.

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UPS to provide lift for DHL Air Express packages in North America

Posted by | May 28, 2008 | |

UPS announced it will work with DHL Express U.S. toward an agreement to provide transportation in its air network for all of DHL’s express, deferred and international package volume within the United States. UPS also would provide air lift for DHL packages between the United States, Canada and Mexico.

A final contract is anticipated later this year. The agreement, when finalized, would be expected to extend for 10 years and produce up to $1 billion in additional annual revenue for UPS. The company said it would begin phasing in a limited amount of volume in 2008 with ramp up in 2009.

The agreement would not involve the pick-up or delivery of DHL packages to their customers, only the transport of packages, primarily between airports, in North America. As such, the work will be similar to that currently performed by UPS for the U.S. Postal Service.

UPS will be able to handle much of the anticipated new volume in its existing air network, although additional capacity will be added beginning in 2009 upon full implementation. The total amount of capacity needed will be determined at that time; however, UPS is currently scheduled to take delivery of seven new aircraft in 2008 and another five in 2009. The company is also well along on a USD 1 billion expansion of its UPS Worldport air hub in Louisville, Ky.

The arrangement with UPS is part of a broader U.S. restructuring announced by Deutsche Post World Net at a press conference in Bonn, Germany.

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Deutsche Post World Net to restructure U.S. Express business

Posted by | May 28, 2008 | |

Deutsche Post World Net announced a plan to restructure its DHL U.S. Express business by working with UPS for airlift capacity and reducing costs in its ground infrastructure. Under the plan, DHL and UPS have agreed to develop a contract whereby UPS will provide air uplift for DHL Express U.S. domestic and international shipments within North America.

In addition, DHL will align its U.S. Express infrastructure to existing shipment volumes by redesigning its ground linehaul network to better match capacity with customer requirements. The impact on service levels will be minimal with less than 4 percent of shipments affected. DHL remains focused on delivering international and domestic Express products, offering an attractive alternative for U.S. customers and keeping a strong commitment to the U.S. market.

The restructuring plan will lead to sustainable improvements in financial performance and provide a sound starting point for a more efficient and customer-oriented business in the future. In 2008, the company expects an underlying EBIT loss of USD 1.3 billion in U.S. Express. Through the expected cost savings of around USD 800 million in 2010 and around $1 billion in 2011, underlying EBIT will improve accordingly. First positive effects of the plan will start showing already in 2009. The company expects to spend up to USD 2 billion to finance the restructuring plan.

Due to the uncertain economic situation in the U.S., Deutsche Post World Net is reducing its guidance for underlying EBIT in the EXPRESS Corporate Division in 2008 to around 400 million euros from around 500 million euros. Subsequently, the Group’s full-year guidance before non-recurring effects and restructuring costs will be reduced slightly by 100 million euros to around 4.1 billion euros.

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DHL sign air freight agreement with USPS and FedEx

Posted by | May 27, 2008 | |

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.

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.

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