|
DHL to restructure North American ops
Deborah Aarts, features editor, MM&D
Leipzig, Gerrmany--In an effort to stop two years of heavy losses, DHL Express is planning a reorganization of its US business.
Pending a contract anticipated for later this year, the company will outsource its airlift services to UPS for domestic flights and international shipments to and from Canada and Mexico. DHL will pay UPS US$1 billion a year for the service.
"We believe this arrangement with DHL would represent a wise use of our assets and network capacity while creating a substantial and profitable revenue stream for our company," said David Abney, UPS's chief operating officer. "We plan to move forward quickly on the final contract."
If the deal goes through, DHL will end contracts with ABX Air and Astar Air Cargo, the two companies it currently uses for much of its US air carriage. The company has not decided what to do with its corporate-owned aircraft in the US, but representatives suggested the planes might be redeployed into the global fleet.
DHL is also reorganizing its US ground operations by consolidating and closing some stations and re-engineering some routes. The company's air hub in Wilmington, Ohio is slated to be repurposed as a ground hub. The changes are forecast to result in 1,500 to 1,800 job losses for DHL employees.
As the company announced at a press conference at corporate headquarters in Bonn, Germany last week, the efforts are meant to stave off what Frank Appel, CEO of DHL's parent Deutsche Post World Net, described as "unacceptable losses." The company lost US$1 billion in the US market in 2007, a figure estimated to reach $1.3 billion in 2008.
"Taking a pragmatic approach, we will go on to be a smarter player in the challenging US Express market," Appel continued. The news came two days after DHL formally opened its air hub in Leipzig, Germany. It has a hangar, large tracts of runway, offices, a fuel tank farm and a 48,000 square-metre distribution centre that can process 60,000 packages, 36,000 envelopes and 9,000 non-conveyable items each hour.
|
