DHL in talks to sell US Unit to FDX

[Jurassic Jet]

Hang on boys.

http://www.reuters.com/article/marketsNews/idUKL2417951620080124?rpc=44

 

[SkyMiles]

Hang on to what? More like buh-bye boys! Now where is that resume paper again?

 

[Clyde]

Date Of Hire

 

[SkyMiles]

Date of hire for what?

 

[Jurassic Jet]

Date of hire for what?

I think he meant everyone will be getting a new date of hire when they find a new job.

(I know what he meant, but my statement is more reality)

 

[hvydriver]

I think he meant everyone will be getting a new date of hire when they find a new job.

(I know what he meant, but my statement is more reality)

Yeah. If that happens, your right JJ. I'm taking my DC8 to SDF tonight and claiming sanctuary. It works in the movies, right??

 

[nitefr8dog]

Yeah. If that happens, your right JJ. I'm taking my DC8 to SDF tonight and claiming sanctuary. It works in the movies, right??

The only one who could make this work is ABX. FDX would rather watch DHL destroy itself than spend money helping them, besides FDX is out of money. ABX now has enough lift and moved more freight than this on time! ( I am talking about express freight by 1030 am next day. )

 

[SkyMiles]

Maybe the paper misheard the "sources". Maybe they said ABX, not FDX?!

 

[Whistlin' Dan]

From Air Cargo World


DP to Sell DHL to FedEx: Report
Deutsche Post World Net plans to sell DHL to Fedex and talks are underway, according to a report in the Financial Times Deutschland, which quoted sources familiar with the matter.
The paper quotes a manager within the company as saying that Deutsche Post CEO Klaus Zumwinkel "wants to leave the company in a clean condition" when he retires in November.
Officials at Deutsche Post and FedEx refused to comment on what they described as rumors or speculation.
Financial investment analysts project DHL may lose up to $900 million this year in the United States, where the company has struggled to mount a challenge to UPS and FedEx in the domestic parcel and express market. Deutsche Post said Wednesday it will take an $874 million writedown of the company's value.
Among other internal problems, DHL last week announced layoffs in Germany and this week moved to demand a $93 million payment from its less than friendly ally ABX Air. Michael Fabey
Traffic World

 

[shooter]

This is just a news article. It is not a press release from DP, so it's a bunch of speculation. DP's CFO said just earlier in the week an out right sale of DHL USA is very very unlikely. Plus what would the investors think about selling an ailing portion of the business to a competitor that will more than likely slit your throat when you are not looking for pennies on the dollar? What of the DHL commitment to Ohio with the new by-passes being cut in and tax breaks they have for jobs? You think that is just wipped away by selling a business off? While all of this doom and gloom could play out the way many are seeing it, I find it highly unlikely. There may be a business arrangement with Fedex coming but does it not make more sense for that to be a delivery network? I mean look at the USPS when they sold off their express packages to be flown of Fedex. Christmas packages sat on ramps until January in favor of Fedex customers. Don't you think DHL packages and customers would suffer the same fate? It would be a death blow to DHL in a matter of time. Of course this is all wishful thinking on my part because of all the ILN jobs at stake, but it does not make sense that DP would do that.

My prediction: Fedex and DHL strike a joint delivery agreement where each will deliver packages in their respective countries while they will still be responsible for selling/sorting/delivering packages to the others stations. i.e. ILN will stay the same but who picks up the packages and drops off the packages at the outstations change to Fedex.

(I'm a sucker for hope)

 

[MACHTRANSDUCER]

my wife's second cousins husband's daughter's boyfriends mom who was at walmart said she heard from her great uncles best friend who works at generations that he saw a fedex truck in ILN yesterday.... but im guessing what we all really want is jurassic jet to post another reply so we can all admire the avatar!!:beer:

 

[Whistlin' Dan]

What of the DHL commitment to Ohio with the new by-passes being cut in and tax breaks they have for jobs?

I think that's the first time I've ever seen "DHL" and "committment" used in the same sentence.

Seriously? That question might best be answered by some of the lawmakers in Frankfort who gave DHL huge tax incentives to build their new $240,000,000 hub at CVG...a hub they moved out of within 2 years.

 

[TWA]

Yeah, um, the Germans have absolutely no local interest whatsoever. All they see is what appears on the spread sheet in front of them.

ABX needs to stop cuttin their planes up, it very well may be their show again.

 

[shooter]

I think that's the first time I've ever seen "DHL" and "committment" used in the same sentence.

Seriously? That question might best be answered by some of the lawmakers in Frankfort who gave DHL huge tax incentives to build their new $240,000,000 hub at CVG...a hub they moved out of within 2 years.

I don't know Dan, anything can happen. My prediction stands.

 

[EuroWheenie]

We've been bleeding Dollars by the billions over the years in the US market. The purchase of ABX was supposed to turn the tide, but sadly no substantial improvment was achieved.

It is also worth nothing that whilst ABX (Ground) have contributed to the DHL family, ABX (Air) have always been a problem child, and I'm not only thinking about the disaster that was (and to a degree still is) the ILN Hub. Integrating ABX is a major headache; somehow the top boffins in ABX still think they are a fully independent airline (which is true only on paper) and can run the show they way they like. There is a large amount of animosity towards ABX (Air) in the global HQ.

ASTAR, on the other hand, has for the last few years only been a positive experience.

It would not come as any surprise to those of us who work with DHL on the eastern side of the great salty divide to see DPWN spin-off the US domestice part of the DHL business, as this is the area that has resulted in DHL posting negative results for years. There will still be a DHL presence in the US, but only for international shipments.

By eliminating the US domestic business we can, hopefully, also rid ourselves of ABX. If the sell goes through, I predict ASTAR will be tasked with doing the international flying to North, Central and South America from the US.

Longhaul flying will, most likely, be performed by LH Cargo, Polar, DHL Air or EAT (the forthcoming 767 operation) and Newco (the forthcoming 777 operation based in LEJ).

 

[Box-Hauler]

Euro,

How will your beloved DHL survive in the world market if 50% of all there business touches the U.S. Do you really believe that the company in Iowa will use DHL if they only fly out of JFK and LA. The problem with all of Europe is they do not understand the US market. We want our meal super sized, we like our truck super sized and we want our packages delivered the next day. We will accept a 10am delivery but we want it there by 9. The next week will not cut it. If DHL pulls out of the US market within 5 years they will be dead, and the rest of the world will realize the benefits of next day service via FedEx or UPS.

 

[EuroWheenie]

Box,

I would hardly claim to be in love with DHL, and I quite think the feeling is mutual.

DHL will not give up on the US, and will still be delivering freight to all required destinations. But only international shipments; we'll not be competing with the FedUPS on domestic freight. So your super-size loving countrymen can still expect to see a yellow van delivering documents from Europe or Asia, but the driver is not going to accept a package going from Ohio to Delaware.

Since the major growth markets are to be found in Asia, and given that DHL has a rather strong presence there, I will hazard a guess that a the pull-out from domestic US service will prove to be an excellent choice, also in 5 years.

Maybe you are right, maybe us Europeans don't understand the US market. I could probably say the same for US understanding of the European market, but that's not important. If Europeans don't understand the market, as you claim, wouldn't it then be better to pull out?.

 

[shooter]

Box,

I would hardly claim to be in love with DHL, and I quite think the feeling is mutual.

DHL will not give up on the US, and will still be delivering freight to all required destinations. But only international shipments; we'll not be competing with the FedUPS on domestic freight. So your super-size loving countrymen can still expect to see a yellow van delivering documents from Europe or Asia, but the driver is not going to accept a package going from Ohio to Delaware.

Since the major growth markets are to be found in Asia, and given that DHL has a rather strong presence there, I will hazard a guess that a the pull-out from domestic US service will prove to be an excellent choice, also in 5 years.

Maybe you are right, maybe us Europeans don't understand the US market. I could probably say the same for US understanding of the European market, but that's not important. If Europeans don't understand the market, as you claim, wouldn't it then be better to pull out?.

Place a wager on that weenie?

 

[shooter]

Box,

I would hardly claim to be in love with DHL, and I quite think the feeling is mutual.

DHL will not give up on the US, and will still be delivering freight to all required destinations. But only international shipments; we'll not be competing with the FedUPS on domestic freight. So your super-size loving countrymen can still expect to see a yellow van delivering documents from Europe or Asia, but the driver is not going to accept a package going from Ohio to Delaware.

Since the major growth markets are to be found in Asia, and given that DHL has a rather strong presence there, I will hazard a guess that a the pull-out from domestic US service will prove to be an excellent choice, also in 5 years.

Maybe you are right, maybe us Europeans don't understand the US market. I could probably say the same for US understanding of the European market, but that's not important. If Europeans don't understand the market, as you claim, wouldn't it then be better to pull out?.

Place a wager on that weenie?

 

[shooter]

Box,

I would hardly claim to be in love with DHL, and I quite think the feeling is mutual.

DHL will not give up on the US, and will still be delivering freight to all required destinations. But only international shipments; we'll not be competing with the FedUPS on domestic freight. So your super-size loving countrymen can still expect to see a yellow van delivering documents from Europe or Asia, but the driver is not going to accept a package going from Ohio to Delaware.

Since the major growth markets are to be found in Asia, and given that DHL has a rather strong presence there, I will hazard a guess that a the pull-out from domestic US service will prove to be an excellent choice, also in 5 years.

Maybe you are right, maybe us Europeans don't understand the US market. I could probably say the same for US understanding of the European market, but that's not important. If Europeans don't understand the market, as you claim, wouldn't it then be better to pull out?.

Place a wager on that weenie?

 

[TWA]

Euro,

Could you elaborate a little more on how ABX was and is the problem child?

 

[shooter]

It seems he has bone to pick with ABX, eh? I am still waiting for a wager on his prediction that DHL will be US International only. There is no way DHL would commit that kind of suicide. They may not deliver it, ABX may not fly it, Astar may not fly it, it may not go through a sort in ILN, but it will always be a DHL product. He is NUTS :nuts: .

 

[EuroWheenie]

Shooter

No, no and no - I don't gamble

You are correct on my feelings about ABX though, I detest their management with a vengence.

TWA

There are many issues, the vast majority of which I'm not privy to - I only get to hear the rumours and moaning in the Tower of Power (BRU HQ). What I do know is as follows:

- ILN Hub. A disaster from the start, getting better but still crap. Lack of commitment from ABX management to solve the issues.

- Alignment of procedures. The rest of the world (including ASTAR) pretty much run the show according to the same SOPs (talking ground handling here). There are obvioiusly regional variations, but by and large we're all singing from the same sheet. Except ABX, and that is a major headache.

- Systems, equipment. As an example, ABX were offered the Sable W&B software free of charge. Sable is probably the most advanced W&B software in the world. But ABX managed to design a test where Sable stood no chance of competing against the legacy system - a legacy system that works fine when you're loading the phoneboot size bins on DC9s, but is at a total an utter loss when dealing with A-cans and wide-bodies aeroplanes. A very frustrating experience.

- Lack of cooperation. Most airlines operating for DHL has some sort of cooperation. We frequently talk to the senior bods at EAT, LHC, ASTAR, WOA etc etc etc. But ABX? Nope, they are fully intent of going it their own way, seemingly oblivious to the fact that they are but a small part of a world-wide operation. The arrogance displayed by what is, in essence, nothing but an ACMI provider is baffling. We get better cooperation from Kalitta for crying out loud!

 

[EuroWheenie]

Shooter

Fact remain that the US domestic operation is costing DHL roughly a billion dollar every year. This has been a problem for years, and apparently one that DHL has been unable to overcome. In that situation there are really only 2 options - shut the loss-making parts down or continue to loose vast amounts of cash.

We still need to service the US, but for international clients only. Please keep in mind that, EBITA wise, the US intl. operation is not a major earner for DHL. The reason we have to continue serving the US is because our intl. customers demands that we do so.

 

[shooter]

Shooter

Fact remain that the US domestic operation is costing DHL roughly a billion dollar every year. This has been a problem for years, and apparently one that DHL has been unable to overcome. In that situation there are really only 2 options - shut the loss-making parts down or continue to loose vast amounts of cash.

We still need to service the US, but for international clients only. Please keep in mind that, EBITA wise, the US intl. operation is not a major earner for DHL. The reason we have to continue serving the US is because our intl. customers demands that we do so.

You could not be more wrong. If you think DHL will go to a client like IBM, or Microsoft and tell them that they will take their package to Paris, but they need to find another shipper for their package to Kansas City, I can guarantee DHL will have no US business at all. That may be how Europe does it but we just dont roll like that here in the States. With UPS and FedEx here they will eat DHL for lunch. They need to offer the customer the entire service product range or there will not be a customer to serve. And you can take that to the bank.

p.s. you are correct that DHL is bleeding money here in the US. And if you look at DHL history they have always lost money here in the US. Does that not make a little bell in your head start to ring that the something that is wrong with the US business model has ALWAYS been wrong with the US model? That problem was around well before the purchase of Airborne Express.

 

[Whistlin' Dan]

We've been bleeding Dollars by the billions over the years in the US market. The purchase of ABX was supposed to turn the tide, but sadly no substantial improvment was achieved.

I wasn't in the board room when the decision to buy ABX was made, but I think the idea was to give DHL more presence in the US market. At the time, DHL could get something from NYC to the hinterlands of Asia, but not from Montezuma, Iowa to London. The purchase of ABX was supposed to fix that, and might have, had DHL been willing to make the financial committment to building a reputation for service in this country. Instead, they tried to do it "on the cheap" and it hasn't worked out for them. Anybody working in flt ops has seen numerous examples of it on the line, but unfortunately, that's just the tip of the iceberg. Poor management abounds throughout DHL and it's affiliated companies.

UPS and FedEx both lost billions building their international business, as has DHL in trying to build their domestic business. The difference is that UPS and FedEx stuck it out, while DHL appears to be throwing in the towel.

 

[TWA]

A couple things about ILN/ABX.

1. The sort worked fine before DHL showed up. Doesn't sounds like an ABX problem to me.

2. I don't blame ABX for not bending over to DHL like daz has. They were treated like the red headed step child from day 1, and have responded accordingly.

ABX had a delivery system in the US that worked. Just because it wasn't the way Astar/DHL was doing things doesn't mean it was wrong. If it ain't broke, don't fix it!

 

[Whistlin' Dan]

ABX had a delivery system in the US that worked. Just because it wasn't the way Astar/DHL was doing things doesn't mean it was wrong. If it ain't broke, don't fix it!

I know a guy who said the same thing about Betamax.

 

[Box-Hauler]

Euro,
You show your lack of understanding the difference between US and Europe by stating that customers will only us DHL for international. As Shooter explained that will not happen. We as a country want everything in a one stop shop (Wal-Mart). We will not go to DHL to ship international when FedUPS will do it for us. I will say it again. If DHL does not service every city in the U.S. somehow, they will be gone world wide in 5 years.

 

[Box-Hauler]

I know a guy who said the same thing about Betamax.

Great example of a superior product not making it due to Sony's lack of vision....