Tag: UPS

Presentation by Frank Appel on DHL U.S. Express Restructure Plans

Posted by | May 28, 2008 | |

Deutsche Post World Net unveiled a plan to restructure its DHL U.S. Express business. The 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. Under the plan, DHL U.S. Express will redesign the network to better match capacity with customer requirements and partner with UPS for airlift capacity on domestic and international Express products in North America. DPWN Chief Executive Officer Frank Appel presents the rationale behind the plan and the anticipated improvements.

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UPS to provide lift for DHL Air Express packages in North America

Posted by | May 28, 2008 | |

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.

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Deutsche Post World Net to restructure U.S. Express business

Posted by | May 28, 2008 | |

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.

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UPS says intra-Asian trade offsets slower U.S. demand

Posted by | May 27, 2008 | |

United Parcel Service Inc said on Tuesday that its business within Asia was more than offsetting slower trade to the United States, but it added that Asian companies were cautious about the outlook.

UPS said that it expects business within Asia to drive growth in its global freight forwarding business this year to “quite a bit higher” than forecasts for 8 percent growth in the freight forwarding industry worldwide.

“We’re seeing very strong growth intra-Asia. It’s the China effect,” Derek Woodward, Asia-Pacific president of the world’s biggest package delivery firm, told a news briefing.

A UPS survey of small and medium-sized Asian companies, released on Tuesday, showed that more than half were optimistic about their prospects this year given strength in intra-regional trade and growth in business in Europe and the Middle East.

But they sounded a note of caution, saying U.S. economic woes were creating uncertainty, particularly for Japanese companies.

For the first time since the survey’s launch four years ago, more than half of Asian SMEs, or 51 percent, said they would freeze or cut staff this year. Some 62 percent felt less competitive than last year, partly due to rising labour costs.

The survey, conducted in December and January across 12 Asia-Pacific markets, polled more than 1,200 well-established SMEs.

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