Tag: DHL

Deutsche Post seeks FedEx partnership to stem DHL Express US losses – report

Posted by | Jan 25, 2008 | |

Deutsche Post is reportedly in talks with FedEx over a partnership with DHL Express designed to reduce its heavy losses in the USA. The report, which follows news of the planned EUR 600m writedown of US assets, has not been confirmed.

The Financial Times Deutschland reported today that DPWN executives want FedEx to take over DHL Express’ domestic US operations. In exchange, DHL Express would provide services in Europe for FedEx. Talks are taking place with FedEx chairman Fred Smith, the newspaper said, citing sources close to the company. DPWN CFO John Allan told the newspaper: “We have several options.”

News agencies cited DPWN spokespersons as saying that no decisions have yet been made about the future of the US express business. Talks with FedEx were not confirmed.

The Frankfurter Allgemeine Zeitung’s online website cited Allan on Friday as saying that it was “ very, very unlikely” that the domestic US business would be given up due to the strategic importance of the market. The priority was to reduce the US losses “as quickly as possible and very substantially”. But this did not necessarily mean having to make a profit in the USA since a substantial amount of international business was generated there, he noted.

Influential analysts recently called on DPWN to downscale its US express operations significantly to reduce long-running heavy losses. Last November, due to the increasing impact of the slowing US economy, DPWN scrapped the target of achieving a breakeven in the USA by 2009.

Read More

DHL denies sale to FedEx

Posted by | Jan 25, 2008 | |

A DHL spokesman says parent company Deutsche Post World Net has no plans to sell its U.S. Express delivery service to its Memphis-based rival FedEx Corp.

“There is no question about our exiting the U.S. business, a withdrawal can be completely ruled out,” DHL spokesman Jonathan Baker said in a phone interview with Memphis Business Journal, a Courier sister paper, Friday morning.

Baker said he’d been fielding calls from news media across the country after a story about a possible deal appeared in Financial Times Deutschland, a German business newspaper, Friday morning.

That report said Deutsche Post World Net was in talks with FedEx founder, chairman, president and CEO Frederick Smith about the possibility of a buyout or a partnership.

In return, Deutsche Post World Net would give FedEx a larger presence in the European market, according to the report.

DHL is the main customer for ABX Air, based in Wilmington. DHL has spent billions of dollars to build up its domestic presence. Nonetheless, U.S. operations lost USD 900 million last year and analysts don’t foresee a profit this year.

The company has said it will take an USD 874 million writedown of the value of its struggling DHL Express business in the Americas. Baker said that move was more about accounting than sales and said DHL’s problems were industrywide.

“Just like everyone else, (our problems) are a result of economic conditions that have affected the industry as a whole,” he said. “We’re continuing improvement in our U.S. business and are dedicated to serving our customers.”

Read More

Deutsche Post rises on report it may sell U.S. unit

Posted by | Jan 25, 2008 | |

Deutsche Post AG rose as much as 5.9 percent in German trading after Financial Times Deutschland said it may sell the unprofitable U.S. package and express-delivery unit to FedEx Corp.

Deutsche Post shares advanced as much as 1.27 euros to 22.70 euros and were up 3.9 percent at 12:15 p.m. in Frankfurt.

Bonn-based Deutsche Post may sell the U.S. delivery operation to FedEx and seek a merger partner for the Deutsche Postbank unit later this year, the German financial daily said today, citing unidentified company officials.

Deutsche Post spokeswoman Silje Skogstad declined to comment on plans for the U.S. DHL unit and said the company is evaluating several options to improve earnings. Regarding Deutsche Postbank, she referred to earlier comments by Chief Executive Officer Klaus Zumwinkel, who said the company is currently the lender’s most suitable owner.

“Elimination of these losses will provide a material boost to earnings,” London-based Collins Stewart analyst Andrew Fitchie said in a note to investors. “The clear message from the group is that restructuring is definitely under way, at long last.”

Deutsche Post will write down the value of the DHL Express Americas division by 600 million euros (USD 874 million), the company said Jan. 23. Chief Financial Officer John Allan said yesterday that the company would reveal details of a turnaround plan for the U.S. business in a “small number of months.”

The German company planned for DHL to break even in the Americas by 2009 and scrapped the deadline last year. The postal service bought the business in 2002 to compete with Atlanta-based United Parcel Service Inc. and Memphis, Tennessee-based FedEx in their home market.

Read More

FedEx in talks to buy DHL stake

Posted by | Jan 25, 2008 | |

FedEx reportedly is in talks to buy all or part of Deutsche Post’s DHL delivery business in the U.S. in a deal that would help it challenge larger rival UPS.

Seeking to cut losses in the hyper-competitive domestic fast delivery business, Deutsche Post may move to trim its DHL business in the United States, without abandoning it completely, according to published reports on Friday.

Deutsche Post CFO John Allan was quoted by Frankfurter Allgemeine Zeitung, a German newspaper, that a total sale of DHL in the U.S. is “very, very unlikely.”

A deal could be in the works by May at the latest, according to the report.

Shares of FedEx rose 1.6% to end at USD89.96, bucking the move down in the overall market. UPS fell 1.8% to USD69.97.

A spokesman for Memphis-based FedEx didn’t return a phone call from MarketWatch.

Analyst Rick Paterson of UBS said FedEx doesn’t really need DHL’s U.S. delivery assets, and that it simply has to wait for it to lose ground over time to eventually win over its domestic market share.

FedEx, however, would benefit if DHL allowed it to become the U.S. distributor of its hefty package traffic originating in Europe and Asia, he said.

FedEx would have the edge in any talks because Deutsche Post is under pressure from shareholders to produce some kind of value for DHL.

A deal between DHL and UPS is less likely because of the “more contentious relationship” between the two giants overseas, he said.

One of the world’s largest delivery companies with 4,000 offices, DHL traces its roots to 1969 in the U.S. before being acquired by Deutsche Post in 2002.

Read More

DHL demands USD 93 Million from ABX

Posted by | Jan 24, 2008 | |

The tempestuous relationship between DHL and ABX Air turned even testier Jan. 14 when DHL demanded ABX prepay a USD 93 million note issued as part of the DHL spin-off of the air line in 2003, ABX reported to the Securities and Exchange Commission.

DHL says the recent USD 350 million ABX acquisition of Cargo Holdings International constitutes a “change of control” of ABX under terms of the note. ABX says the purchase resulted in no change of control.

Anticipating possible problems with the note, ABX Air had made arrangements to borrow up to USD 61 million from certain former significant CHI shareholders if the acquisition prompted DHL to demand ABX to prepay the note.

ABX also entered a USD 345 million credit agreement related to the CHI deal that should prevent a default of the note due to the DHL prepayment request, the airline reported. The company has requested an extension of period for meeting the agreement requirements to 15 days from the current five.

Read More

Advertisement

Advertisement

Advertisement

P&P Poll

Loading

Have you noticed a decrease of non-EU inbound parcel volumes since the implementation of the new €3 charge?

Thank you for voting
You have already voted on this poll!
Please select an option!


View ResultsHide Results

Post & Parcel Magazine


Post & Parcel Magazine is our print publication, released 3 times a year. Packed with original content and thought-provoking features, Post & Parcel Magazine is a must-read for those who want the inside track on the industry.

Subscribe to the Magazine

 

Pin It on Pinterest