Tag: DHL

Analysts hand DHL bad new year's forecast (U.S.)

Posted by | Jan 17, 2008 | |

Worldwide shipper DHL is doomed to fail in the United States unless it radically shifts its business model, two well-regarded investment firms say.

Now, Morgan Stanley and Bear Stearns separately contend that DHL could eventually contract out operations to competitors, abandon its domestic delivery routes or sell off its U.S. operations entirely.

Facing U.S. operations that lost USD 900 million last year, the company’s new chief financial officer has “indicated the group needs to have a structural solution to U.S. losses” by March 6, according to the Morgan Stanley report.

“While we can’t respond to speculative reports, we have made a commitment to the U.S. market because of its importance to our overall global (DHL) Express strategy,” spokesman Richard Gibbs said in an e-mailed statement.

DHL, owned by German-based Deutsche Post, 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.

Morgan Stanley foresees three possible solutions:

Deutsche Post should try to sell all of DHL Express or at least the U.S. operations to UPS, FedEx or the U.S. Postal Service

DHL could fly parcels in but contract delivery to FedEx, UPS or the U.S. Postal Service

It could reduce its footprint to metropolitan areas and either contract pickup and delivery in the rest of the U.S. to the three carriers or offer only international delivery.

The first two options are less likely, according to Morgan Stanley.

In a November Goldman Sachs report, the firm said it was unlikely that DHL’s U.S. operation was on track to perform well.

Beh of Bear Sterns said any DHL decision to quit domestic operations would be difficult.

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Competition heats up in the Asian small-parcel market

Posted by | Jan 17, 2008 | |

Supply chain professionals being tasked with establishing or managing small parcel networks in Asia report being pleasantly surprised by the coverage and competition from the major parcel carriers. That said, there are some major differences between managing a small parcel logistics networks in Seattle and Shanghai.

Tom Stanton, international supply chain analyst at consulting group AFMS in Portland, Ore. says the three major parcel carriers—UPS, FedEx and DHL—are all investing heavily in the Asian markets, particularly China. He says the three are competing for reputation and market share in Asia just as fiercely as they do in the U.S., but from perhaps different positions.

Stanton says DHL has been in Asia the longest and the company claims to have as much as 38 pct of the market and combined the big three hold about two-thirds of the market. All are investing and growing dramatically in Asia. UPS is building a new hub at Shanghai’s international airport. UPS reported more than 20 pct overall business growth in China in the third quarter of 2007, with intra-Asia trade representing the fastest growth.

FedEx aims to begin operations at a USD 150 million hub in the southern city of Guangzhou in December 2008.

Most recently, DHL announced in November it was spending USD 175 million to build its North Asia Hub in Shanghai at the Shanghai Pudong International Airport, due to open in the second half of 2010. The hub will be DHL’s sixth in Asia, and will be able to handle as many as 20,000 parcels and 20,000 documents an hour, the company said.

In a Bloomberg interview, Jerry Hsu, DHL’s president of Greater China, said DHL may form a domestic air-cargo venture with a local carrier. The company has held talks with a number of airlines and drawn up a shortlist based on their hubs and gateways, he added.

Beyond the three major small package players, TNT Logistics and APL Logistics may be the only other names recognizable to U.S.-based supply chain managers. The rest of the market is filled in by local and regional Asian firms covering short shipments between factories or businesses.

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DHL to pay Contractors USD 25M (US)

Posted by | Jan 16, 2008 | |

DHL will pay USD 25 million to settle a national class-action suit by some 1,400 contractors stemming from payment disputes dating back to 1994, according to company officials and one of the lawyers representing one of the contractors.

The contractors alleged that glitches in the DHL computer system – a legacy from Airborne Express, which DHL bought in 2003 — prevented certain types of shipments from being processed correctly, said R. Anthony Rupp III, a lawyer with the Buffalo firm of Rupp Baase who represented contractors involved in the case.

While linking data from shipments from across the country with confirmation information, the DHL system also mistakenly prevented any payment for those jobs, the lawsuit alleged.

DHL denies any such glitches in its computer system. “There are none,” said Josh Frank, DHL vice president of legal.

The company agreed to the settlement, Frank said, because such class action lawsuits can be distracting an expensive.

In an internal memo to DHL managers obtained by Traffic World, the company said it had settled “to avoid prolonged and expensive litigation” with a one-time payout that it hopes “as many contractors as possible” will pursue.

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DHL Express France to test environmental vehicles

Posted by | Jan 16, 2008 | |

DHL Express France has announced plans to start testing a new highly ecological vehicle in Lyon in cooperation with manufacturer Renault Trucks and the local network of urban communities ‘Grand Lyon’ in order to measure the impact of the truck on the environment.

These tests are part of the European research programme FIDEUS (Freight Intelligent Delivery of Goods in European Urban Spaces) which aims at developing new concepts of transportation in urban areas to minimize the emissions.

The aim of the tests is to validate regulations covering safety, noise reduction and CO2 emissions as well as to check its operating efficiency.

This vehicle will be tested in real-life conditions by a DHL Express driver who will carry out a cycle of tests as part of his usual route when picking up and distributing DHL shipments in the city centre.

The Renault Trucks prototype is equipped with an advanced electronic measurement system and has special equipment allowing it to reduce heavy noise and polluting emissions. It also includes a telematics system informing the driver when he enters an urban area so he can activate the noise and pollution reduction system.

Since 2005, FIDEUS has brought together the players of the automotive industry, transport and logistics sectors and the cities of Hanover, Lyon and Barcelona as well as various authorities. FIDEUS is co-financed by the European Commision’s programme of research and development of sustainable ground transportation.

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FedEx Significantly Improves Less-Than-Truckload (LTL) Services

Posted by | Jan 16, 2008 | |

FedEx Freight has improved its service in key U.S. markets and FedEx National LTL now provides long-haul shippers with improved on-time service reliability after re-engineering its network, FedEx Freight, an operating company of FedEx Corp. announced today.

FedEx Freight is a provider of regional next-day, second-day and extended LTL freight services, and has cut transit times in half ” from two days to next day ” from the Las Vegas area to Oakland, San Jose, Sacramento, Bakersfield and other large cities in Central California, and from Vancouver, British Columbia into the U.S. Pacific Northwest.

FedEx Freight has accelerated delivery from three days to two days in many other cities. Overall, FedEx Freight has helped its customers who depend on fast-cycle logistics by improving service standards in more than 1,000 U.S. lanes in the past year.

FedEx National LTL, provider of long-haul LTL services, has adopted a strictly scheduled line-haul operation to enhance reliability. Like FedEx Freight, FedEx National LTL employs advanced information systems that support internal planning and provide shipment visibility to customers. These improvements benefit customers with planned inventory replenishment. FedEx National LTL was created in September 2006 when FedEx acquired the business assets of the former Watkins Motor Lines.

In addition to expanding its domestic portfolio through FedEx National LTL, FedEx Freight is enhancing its Canadian service offerings with FedEx Freight Canada.

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