While the air-express industry waits to see how DHL’s huge expansion effort affects the U.S. market for expedited cargo, the impact on DHL is becoming more evident. DHL parent Deutsche Post World Net announced larger-than-expected losses in the Americas, where the company is mounting a $1.2 billion challenge to FedEx and UPS. Deutsche Post followed the disappointing financial results by announcing a management shakeup.
Read MoreDHL announced Wednesday that it will invest a total of USD150 million in Mexico to increase the size of its fleet, remodel its operating and express centers, improve communications schemes, customer relations and publicity. The company is still the number one delivery firm in Mexico despite the fierce competition in the market. It has a quarter of the local market. Leticia Navarro, director general of DHL in Mexico, said that the firm has managed to expand its network to 228 countries, which means that it now serves 650,000 destinations and has 71,000 workers around the globe. In Mexico alone, DHL has 25,000 employees working in 140 express centers.
Read MoreDHL (USA) stated on November 11, 2004, it would spend euro20 mil (USD25.6 mil) next year to build three new processing centers in Russia. It is planned to build a 10,000 square meter, euro9.5 mil euro terminal in the Moscow region, close to Sheremetevo airport (Moscow, Russia) and one each in St. Petersburg and Samara. DHL preferred to leased small-scale warehousing facilies before but lack of supply of large-scale facilities forces it to start new construction. DHL plans operations in Russia will grow by 50percent including 60percent for inter-Russian deleveries. TNT (Netherlands) reported 33percent growth of operations in Russia in 2003 mostly due to logistic services rendered to the top international companies, i.e., Sony (Japan), Lucent Technologies (Korea), and Hewlett-Packard (HP) (USA).
Read MoreDeutsche Post World Net intends to extend the Airport Leipzig/Halle into the central European hub of its express and logistics subsidiary DHL. Plans for a move to the alternative location Vatry, France, are not pursued any further at present. As no political consensus on an extension could be achieved in Belgium, it is intended to maintain Brussels as a regional hub from 2008 onwards. Until then, DHL plans to keep activities running at the current scale at Brussels Airport. Following the successful finalization of all negotiations and preparations, start of operations in Leipzig could be realized at the beginning of 2008. The Group plans to invest around 300 million euros in the new site and to create around 3,500 jobs by 2012. “This is a location that would pave the way for the necessary growth of DHL in the future and provides the Group with long-term planning security”, says Dr Klaus Zumwinkel, Chairman of the Board of Management of Deutsche Post World Net.
Read MoreIn Russia DHL has been working since 1984. Now it has 100 its own and agent offices in the territory of the country. Turnover of the company in Russia is not disclosed. According to the Russian division of DHL, in 2004 it will transport 3.2 million cargoes including 60% inside of the country. According to Post of Russia, the market of Russian express delivery market is estimated at $200-250 million (some market players estimate it at $500 million), $150 million of this sum being international delivery more than 70% of which is controlled by the “big four”: DHL -45% (DHL estimates its share at 57%), UPS and TNT- 15% each and FedEx – about 4%. In domestic delivery market significant market shares belong to Pony Express and SPSR Express.
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