Tag: International

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.