Interview with Frank Appel on Restructure Plans
Interview with Frank Appel on Restructure Plans
Read MoreTag: North America
UPS to provide lift for DHL Air Express packages in North America
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.
Read MoreOnline Retail Growth Is Slowing
Economic woes online, too?
Although consumers are reacting to the economic downturn by spending less, this will create more of a hardship for retail stores than for online retail outlets.
“Store sales will be hit harder than Internet sales because affluent shoppers, who form the core of online buyers, tend to ride out economic downturns better than lower- and middle-income consumers,” says Jeff Grau, eMarketer senior analyst and author of the new report, US Retail E-Commerce: Slower But Still Steady Growth.
eMarketer estimates that US retail e-commerce sales (excluding travel) will reach USD 146 billion in 2008, up 14.3% over 2007.
“Still,” warns Mr. Grau, “over the next few years online sales growth rates will steadily decline.”
There is little reason for panic, however.
“A drop in the number of new online buyers is an inevitable sign of the maturation of the online retail channel,” says Mr. Grau.
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Read MoreDHL sign air freight agreement with USPS and FedEx
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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