Browntothebone
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DHL to cut about 45 jobs in Montana
By JAN FALSTAD
Of The Gazette Staff
The package delivery service DHL Express is closing all seven offices in Montana beginning Friday and using the rival U.S. Postal Service to deliver inbound packages to homes and businesses.
DHL will still offer one-way shipping into this region.
Customers wanting to ship packages out of Montana and parts of Wyoming will have to drive to a DHL pickup point, which won't be in Billings, or use another carrier. The pickup point locations haven't been announced yet.
"These are not DHL offices, but they are offices operated by independent contractors of DHL," said company spokesman Robert Mintz in Seattle. "We're basically transferring contractors to USPS."
In Billings, On Target Xpress was the independent contractor that trucked DHL packages around Montana and into northern Wyoming. In Montana, offices will close in Billings, Belgrade, Butte, Great Falls, Helena, Kalispell and Missoula.
About 45 On Target Xpress employees will lose their jobs in Montana. The number of jobs lost in Wyoming was not available. About three employees worked directly for DHL in Eastern Montana and also will be out of work.
On Target Xpress officials were not allowed to discuss the situation. All inquiries were routed to DHL media officials. These regional closures are part of a national restructuring effort, but Mintz said that DHL isn't releasing the total number of offices closing across the United States.
In Wyoming, the Rock Springs and Casper offices will be closed, Mintz said. Although the shutdowns will begin Friday, packages already in the system will continue to be delivered three days later, until June 30.
"We're just looking at areas with the highest costs to serve and we're having USPS deliver the final mile," Mintz said. "It will significantly reduce our cost structure, but allow us to still service our customers."
Reducing shipments to the most remote cities and towns affects less than 3 percent of DHL's total volume, Mintz said, and is not the first step toward ceasing operations in the U.S.
"This is all part of our plans to restructure operations on the express ground side to reduce costs," he said.
The German postal service, Deutsche Post AG, owns DHL. In March, Deutsche Post wrote off nearly $922 million, or 60 percent, of its fourth-quarter profits. In June, Ken Allen, DHL's newly appointed chief executive for U.S. operations, told shareholders that U.S. results were "more than not acceptable."
DHL is considered a lower-cost service than its rivals, according to the Financial Times, but it had carved out only a small market share in the U.S. compared to United Parcel Service and Federal Express.
Sharing shipping costs with its rivals is just one cost-cutting effort by DHL.
According to the Associated Press, earlier this year DHL officials were talking with FedEx about possibly buying DHL. Instead, however, DHL cut a deal with UPS to carry some of its air packages and reportedly is cutting its shipping capacity in the U.S. by 30 percent.
The lease for DHL's Billings office at 201 N. 25th St. runs another year. But Billings developer Aaron Sparboe's family corporation bought the property last November and promptly resold it at a hefty profit - reportedly $1.3 million - to Yellowstone County. The county plans on building a parking garage on the site.
Some severance pay and other benefits will be offered to the laid-off workers by On Target Xpress, but the specifics were not released.
"With gas prices and the economy, lots of companies are changing the way they do business," Mintz said.
Contact Jan Falstad at [email protected] or 657-1306.
By JAN FALSTAD
Of The Gazette Staff
The package delivery service DHL Express is closing all seven offices in Montana beginning Friday and using the rival U.S. Postal Service to deliver inbound packages to homes and businesses.
DHL will still offer one-way shipping into this region.
Customers wanting to ship packages out of Montana and parts of Wyoming will have to drive to a DHL pickup point, which won't be in Billings, or use another carrier. The pickup point locations haven't been announced yet.
"These are not DHL offices, but they are offices operated by independent contractors of DHL," said company spokesman Robert Mintz in Seattle. "We're basically transferring contractors to USPS."
In Billings, On Target Xpress was the independent contractor that trucked DHL packages around Montana and into northern Wyoming. In Montana, offices will close in Billings, Belgrade, Butte, Great Falls, Helena, Kalispell and Missoula.
About 45 On Target Xpress employees will lose their jobs in Montana. The number of jobs lost in Wyoming was not available. About three employees worked directly for DHL in Eastern Montana and also will be out of work.
On Target Xpress officials were not allowed to discuss the situation. All inquiries were routed to DHL media officials. These regional closures are part of a national restructuring effort, but Mintz said that DHL isn't releasing the total number of offices closing across the United States.
In Wyoming, the Rock Springs and Casper offices will be closed, Mintz said. Although the shutdowns will begin Friday, packages already in the system will continue to be delivered three days later, until June 30.
"We're just looking at areas with the highest costs to serve and we're having USPS deliver the final mile," Mintz said. "It will significantly reduce our cost structure, but allow us to still service our customers."
Reducing shipments to the most remote cities and towns affects less than 3 percent of DHL's total volume, Mintz said, and is not the first step toward ceasing operations in the U.S.
"This is all part of our plans to restructure operations on the express ground side to reduce costs," he said.
The German postal service, Deutsche Post AG, owns DHL. In March, Deutsche Post wrote off nearly $922 million, or 60 percent, of its fourth-quarter profits. In June, Ken Allen, DHL's newly appointed chief executive for U.S. operations, told shareholders that U.S. results were "more than not acceptable."
DHL is considered a lower-cost service than its rivals, according to the Financial Times, but it had carved out only a small market share in the U.S. compared to United Parcel Service and Federal Express.
Sharing shipping costs with its rivals is just one cost-cutting effort by DHL.
According to the Associated Press, earlier this year DHL officials were talking with FedEx about possibly buying DHL. Instead, however, DHL cut a deal with UPS to carry some of its air packages and reportedly is cutting its shipping capacity in the U.S. by 30 percent.
The lease for DHL's Billings office at 201 N. 25th St. runs another year. But Billings developer Aaron Sparboe's family corporation bought the property last November and promptly resold it at a hefty profit - reportedly $1.3 million - to Yellowstone County. The county plans on building a parking garage on the site.
Some severance pay and other benefits will be offered to the laid-off workers by On Target Xpress, but the specifics were not released.
"With gas prices and the economy, lots of companies are changing the way they do business," Mintz said.
Contact Jan Falstad at [email protected] or 657-1306.
