DHL going away?

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Bigger cuts loom for DHL’s US service

By James Wilson in Frankfurt
Published: November 9 2008 17:11 by Financial Times

Deutsche Post is poised to reveal bigger cuts than expected to its troubled DHL US express deliveries service on Monday after the rapid economic downturn complicated efforts to restructure the lossmaking business.

The German logistics company has for months been in talks with UPS, its industry rival, to agree a contract that would see UPS handle DHL’s air business within the US. The cost-cutting measure was intended as part of a €2bn ($2.6bn) restructuring plan along with cuts of about 30 per cent in DHL’s ground-based operations within the US.

Deutsche Post is now expected to reduce ground operations further as the deteriorating state of the US economy reduces demand for logistics services.

Falling volumes have complicated the contract talks with UPS, which, when announced in May, was set to be worth about €1bn annually over 10 years.

Other companies in the logistics sector – viewed as a barometer of world trade – have warned of tough times as demand contracts. UPS said last month the volume of packages shipped in the US fell 3.4 per cent in the third quarter, with expectations of a steeper drop in the important pre-Christmas fourth quarter.

Deutsche Post’s plans for DHL in the US also ran into political trouble because of its aim of closing its US hub in Ohio, a key battleground state in the run-up to last week’s election. Politicians including John McCain, the defeated Republican candidate, urged the US justice department to investigate the planned deal.

DHL intended to become a third significant force in the US market but failed to break up the de facto duopoly enjoyed by UPS and FedEx. The company employs about 18,000 in its US express business.

FT.com / Companies / Industrial Goods - Bigger cuts loom for DHL’s US service

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i posted about this (and more details) earlier here:

Washington Post-Quotes:
Deutsche Post AG will close all of its DHL Express service centers, cut 9,500 jobs in the United States and eliminate U.S.-only domestic express shipping by land and air, the company said Monday, citing heavy losses and fierce competition. The Bonn-based company said the new round of cuts are on top of another 5,400 job cuts it already announced:open_mouth::open_mouth::open_mouth:
…
Part of the plan calls for the halt to domestic shipping by Jan. 30, the company said after it closes all of its ground hubs and reduces the number of service centers from 412 to 103 across the U.S.:confused:
…
“The retained U.S. international Express network with a total of 3,000 to 4,000 employees will be tailored to the needs of the group’s international Express service customers,” the company said in a statement. “All international shipments into the U.S. will still be delivered, while 99 percent of the outbound shipments will be picked up.” :slight_smile:

Deutsche Post to cut 9,500 jobs in US - washingtonpost.com