DHL actualy admitted it!!!!

[shooter]

You guys are making simple statements for complex issues. There are other factors than ABX was making money doing it their way. What market they want to be a factor is important as one is much higher yield than another. Flying Tigers ended up in trouble and sold to Fedex because it could not figure out how to carry express packages and telephone poles together. ABX was in the telephone business, DHL likely wanted to be in the high yield package business. They saw Airborne as a means to that and it was probably not a good match.

Airborne was in the express package business, not the telephone pole business you claim. They only concentrated on the B2B/B2C business and did not expand to serving the consumer and why you did not see Airborne commercials. That is also why the C container worked with their business model. They did not want to carry the telephone poles. You must be confusing Airborne with some other carrier.

 

[wickedride]

You guys are making simple statements for complex issues. There are other factors than ABX was making money doing it their way. What market they want to be a factor is important as one is much higher yield than another. Flying Tigers ended up in trouble and sold to Fedex because it could not figure out how to carry express packages and telephone poles together. ABX was in the telephone business, DHL likely wanted to be in the high yield package business. They saw Airborne as a means to that and it was probably not a good match.

Really, Rocket Scientist--F.I.

 

[Publishers]

I have the correct company and used to have lunch with Robert Brasier and Graham at all the Air Cargo meetings.
The point here was that Airborne was in a niche that might not have been the market DHL really wanted to go for. Fedex meanwhile expanded into the Airborne niche as did UPS. Airborne was too limited in their scope for what DHL was trying to achieve in the US hence all those commercials and yellow trucks. Airborne was a means to an end and that end proved elusive. That is what they gave up on.......

 

[shooter]

I have the correct company and used to have lunch with Robert Brasier and Graham at all the Air Cargo meetings.
The point here was that Airborne was in a niche that might not have been the market DHL really wanted to go for. Fedex meanwhile expanded into the Airborne niche as did UPS. Airborne was too limited in their scope for what DHL was trying to achieve in the US hence all those commercials and yellow trucks. Airborne was a means to an end and that end proved elusive. That is what they gave up on.......

I do not see it like that at all. I may not have had lunch with a couple of guys as you have, but I do work there. Airborne was a low cost model for businesses providing the same service FedEx does. They had their contracts and did not expand to the low hanging fruit since it would take more investment to get that growth. I thought they should have invested in the company to get the low volume business, but what do I know. Hind sight and conspiracy theorists believe the reason they did not go for that business and let all the customers go that came to Airborne during the UPS drivers strike was because Donaway was a set-up guy to keep the business attainable for DHL to buy them. The DHL buying Airborne/Airborne buying DHL rumor has been around for years and years before something actually happened.

As for speculation as to what could have happened; Airborne was a profitable company with their niche market and DHL wanted a larger footprint in the USA. We now see the German business plan to raise rates and try to be third player in the premium product of the USA has proved to be a failure. Had DHL left well enough alone and folded in the international product (which is a great product) with the low cost B2B niche of Airborne, they would still be going strong. IMO

Now we have a situation as to what they will now do with their international product. Rumors are all over the place again as to what they would do if the UPS deal is not agreed upon. One is that they donate the Wilmington airpark to the state and limp back to Cincinnati. Another huge loss and write off while still bleeding cash. While I understand they do not want the overhead costs with owning an airpark, they have everything they need in Wilmington. Workers, sort, flexibility of operations, everything. If they were to donate the airpark in exchange for landing rights and lease space, they would have a couple years of no cost operations and not miss a beat. They need fuel-first response, they need de-ice-first response, they need sorters-already there. The local community will have some jobs, ABX would lease the hangar space they are looking for from the new port authority, DHL would have something in return by off setting their loss from the airpark by reduced operating costs at a time they probably need it most. But what will they do? Who knows, but past experience tells me it will be what will lose them the most money.

 

[727Niteflyer]

wasnt Airborne a low cost package delivery. They didnt haul oversize freight like emery or bax did they.

 

[Box-Hauler]

No, Airborne was not into the over sized freight like Emery or BAX, they concentrated on B2B only. They wanted to pick up a big load of next day air from a business and deliver it next day to a business somewhere else. Airborne did not want to waist time with grandma's cookies to little billy. They had a niche and filled it nicely, I do believe that they could have grown more than they did and been a real third competitor. As for the cargo doors, after they had 5 DC8 on the ramp they should have made the commitment to doing the doors, even if they did not need them for the C containers, the planes would have been more valuable in the market.

 

[Publishers]

The difference between where you are coming from and I am is in what is the objective.
FEDEX bought Flying Tigers for their rights into China and other spots when they knew that they would not get them in a reasonable time on their own. That was the objective, not to get into the heavy freight business. If for some reasons, those rights had suddenly gone away, regardless of the profit or not of the freight business, the deal would have been a failure.
That is what I am saying here. The objective was the express package business and it is in that business that most of the expense is, not the flying part. To compete with any established company that has a pick up and delivery infrastructure, you need to have an nearly equivilent infrastructure in place and you will bleed heavily until you get the volume. They did not and so they are giving up. In Europe and other places, they have that infrastructure and volume.
I know Airborne was successful but today, it is probably harder than ever to be a niche player as so many customers want the total solution. I also remember when Airborne got the IBM deal and the boxes did not fit well into the C containers.
Everyone wants the high yield business. That is the objective.

 

[Big Beer Belly]

No, Airborne was not into the over sized freight like Emery or BAX, they concentrated on B2B only. They wanted to pick up a big load of next day air from a business and deliver it next day to a business somewhere else. Airborne did not want to waist time with grandma's cookies to little billy. They had a niche and filled it nicely,

I'm a bit confused by your post (and that of others) referencing B2B as a niche market that Airborne had somehow cornered. B2B is by no means a niche. If it is, then I'm Kris Kringle... ho, ho, ho.

I recall reading just a few years ago that 80% of UPS's daily volume of about 15 million packages was B2B. That's some niche! It's a common misconception that UPS is primarily B2C. As internet shopping increases, I'm sure the B2C market will expand but there's no question that UPS's bread and butter is business to business. Airborne was the cheaper B2B offering in most markets as I understand it. Perhaps that had something to do with their ultimate demise?

BBB

 

[shooter]

I'm a bit confused by your post (and that of others) referencing B2B as a niche market that Airborne had somehow cornered. B2B is by no means a niche. If it is, then I'm Kris Kringle... ho, ho, ho.

I recall reading just a few years ago that 80% of UPS's daily volume of about 15 million packages was B2B. That's some niche! It's a common misconception that UPS is primarily B2C. As internet shopping increases, I'm sure the B2C market will expand but there's no question that UPS's bread and butter is business to business. Airborne was the cheaper B2B offering in most markets as I understand it. Perhaps that had something to do with their ultimate demise?

BBB

You almost solved your own confusion. Low cost B2B is a niche when it is all you cater to. Now that I have your attention, I want a new laptop that does not burn my freakin' lap; a full 6 degree motion fight simulator in my garage; throw a kitchen remodel in there for my wife; a Caribbean cruise would be cool and throw in a new leather jacket. If you can't come through for me, Kris, how about just a better world where people are more understanding?

 

[Big Beer Belly]

You almost solved your own confusion. Low cost B2B is a niche when it is all you cater to. Now that I have your attention, I want a new laptop that does not burn my freakin' lap; a full 6 degree motion fight simulator in my garage; throw a kitchen remodel in there for my wife; a Caribbean cruise would be cool and throw in a new leather jacket. If you can't come through for me, Kris, how about just a better world where people are more understanding?

LOL! :laugh:

Merry Christmas Shooter!

PS... God knows it doesn't take much to confuse me these days...

 

[shooter]

And to you and your family. :beer:

 

[mxer]

To add a small bit to the ABX niche idea: with the internet and emails, that niche basically was gone for ABX by about 2000. Thats why the growth came to a stop. (and the new hire classes stopped around August) Then came the one and only quarterly loss. ABX admitted that they had basically been caught unprepared for the changes in the market place. That is where leadership and vision would have been nice. Joe doesn't have it. JG can't even spell it. As an example, I asked what the business plan was to get jobs back after the first post 2001 furloughs. I was told by MV that they were hoping for another strike by the, then negotiating, UPS pilots "because it really seemed to help business last time". Of course, sticking around for all these years after that, my fault. It was a good ride that will be missed.

 

[FreightBumper]

To add a small bit to the ABX niche idea: with the internet and emails, that niche basically was gone for ABX by about 2000. Thats why the growth came to a stop. (and the new hire classes stopped around August) Then came the one and only quarterly loss. ABX admitted that they had basically been caught unprepared for the changes in the market place. That is where leadership and vision would have been nice. Joe doesn't have it. JG can't even spell it. As an example, I asked what the business plan was to get jobs back after the first post 2001 furloughs. I was told by MV that they were hoping for another strike by the, then negotiating, UPS pilots "because it really seemed to help business last time". Of course, sticking around for all these years after that, my fault. It was a good ride that will be missed.

Ah, MV, he is a mouthpiece that isn't allowed to think about what he is saying before he says it. His bosses have always had him say the dumb things so they wouldn't look any worse than they already do. It is hard to soar with the eagles when your management is a bunch of turkeys.

 

[b707guy]

Gosh, hoping another carrier will go on strike doesn't qualify as a business plan??? Back to school for me!

 

[mxer]

Sadly though, isn't that the business plan that we have seen. They didn't have a plan of where to take this company. We thought that they got lucky by hitching on to the DHL wagon. Unfortunately, DHL my have had an idea of where they wanted the company to go, but didn't have the know how to get there or the common sense to listen to others that could have helped. ABX may not have leadership or vision, but they do have some in the right positions that could have made the day to day decisions that could have made this work. My opinion of course.