DHL in talks to sell US Unit to FDX

[erichartmann]

You're right dog. I only wish that we'd had the wisdom to get on board with the C container program. Things might be different. I am simply appalled that a 40 Billion dollar global company won't take the advice of fine minds like yours. We're doomed I tell you. Doomed!

You're right hvy, but not for the reasons you Astar folks espouse. Ultimately, I belive time will show that DHL's business model is flawed. This is why DHL never amounted to much here in the US, has lost most or all of the old Airborne's customer base, and why UPS and Fedex will eventually dominate the global business, unless of course, DHL elects to change the model.

If it weren't for the repercussions on the people involved I could almost wish DHL would dump ABX and try to go back the to where they were, then build up again using the same basic model. I believe they would fail. To date, they have not shown they have a grasp of what is needed to compete in the US.

This is not to say Airborne was perfect. Airborne made some strategic errors in the late 80's and early 90's which came back to haunt them in the late 90's. And yes, one of the errors was the C container. There were a number of reasons why that was done, one of which was to make the company a less attractive takeover target. Though it made a certain sense with the DC-9's, that was less true with the DC-8's and a huge waste with 767's. That's not say small containers aren't useful. They are, but C's should have gone the way of the dodo once Airborne started buying 8's. The 9's should have been fitted with doors at that time. The 767's should never have been made into C container aircraft. It cost as much to mod the aircraft for C's as it would have to put a door & floor in, and it made the airplane worthless from a financial standpoint.

That, I think, is a large part of why Airborne elected to sell out to DHL. The mistakes might have been repairable, but the risk of failure was very high, the will and perhaps the vision lacking. Easier to sell, take the money and run.

 

[erichartmann]

"Regardless of what I may think or post here, my job is to get my aircraft to it's intended destination within the :15 of scheduled arrival time allowed by my employers ACMI exclusive of certain events beyond my employers control. BTW, that's on the same day it was scheduled to arrive at the destination. This I do on a routine basis, and I take considerable personal and professional pride in doing so."

I don't doubt that one bit.....seriously.

Good. Now consider for a moment, that within the contraints imposed by FAR, my FOM, and ACMI, my management defines my job, which is, as I said to get my aircraft....

 

[erichartmann]

- 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.

Ah, the vaunted Sable system. I'm sure it's a legend in the minds of creators, and works wonders of efficiency within the parameters of its design. Unfortunately, it doesn’t seem to work very well at all in a time sensitive operation, particularly one where a new highly automated sort is grafted onto an older legacy sort.

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.

I can see where it would be frustrating. I guess it’s hard to take when your pet program flops. I wonder that DHL allowed the test at all, much less let the results circulate. Perhaps there is hope.

 

[Flyer8]

Hot off the press

Report: FedEx in talks for DHL deal

updated 6:23 p.m. ET, Fri., Jan. 25, 2008

NEW YORK - FedEx Corp. reportedly is in talks to buy all or part of Deutsche Post AG's DHL delivery business in the U.S., in a deal that would help it challenge larger rival United Parcel Service Inc.
Seeking to cut losses in the hyper-competitive domestic fast-delivery business, Deutsche Post may move to trim its DHL business in the U.S., without abandoning it completely, according to published reports on Friday.
Deutsche Post Chief Financial Officer John Allan was quoted by Frankfurter Allgemeine Zeitung, a German newspaper, as saying that a total sale of DHL in the U.S. is "very, very unlikely."
A deal could be in the works by May at the latest, according to the report.
A FedEx spokesperson declined comment.
"We don't comment on corporate development," FedEx spokesman Jess Bunn told The Associated Press.
A DHL spokesman denied any plans by parent company Deutsche Post to sell its U.S. delivery service.
"There is no question about our exiting the U.S. business, a withdrawal can be completely ruled out," DHL spokesman Jonathan Baker told Memphis Business Journal.
Shares of FedEx rose $1.45, or 1.64 percent, to $89.96, bucking the move down in the overall market. UPS fell $1.25, or 1.76 percent, to $69.97.
Analyst Rick Paterson of UBS said FedEx doesn't really need DHL's U.S. delivery assets, and that it simply has to wait for it to lose ground over time to eventually win over its domestic market share.
FedEx, however, would benefit if DHL allowed it to become the U.S. distributor of its hefty package traffic originating in Europe and Asia, he said.
FedEx would have the edge in any talks because Deutsche Post is under pressure from shareholders to produce some kind of value for DHL.
A deal between DHL and UPS is less likely because of the "more contentious relationship" between the two giants overseas, Paterson said.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

[abxaviator]

How is that "Hot off the press"? Those are last weeks oft cited quotes in a new article.

 

[Flyer8]

Sorry...I thought it was new...Friday evening didn't seem like such old news to me...But then again,I am old, too.

 

[EuroWheenie]

Eric

Major airlines are lining up to purchase Sable, including passenger airlines. It works just fine all over the world, and handles itself quite nicely especially in a time-sensitive environment. I personally have no stake in the system, but do work with people both inside and outside of DHL who speaks very highly of its capabilities.

But not ABX; as could have been expected from ABX management they were of the firm conviction that they knew best in every aspect. And it's true, the legacy ABX system works fine for the kind of operation ABX used to run. It does not, however, come anywhere near being useful for the operation that we're running today.

As for the test, it was designed by ABX and modelled the "old" sorting and loading system. It was marginally faster than Sable. A new test was designed to model the current operation, and the legacy ABX system failed completely. The ABX response? Yep, you guessed, they said the test was flawed.

Let's keep one thing in mind here: The introduction of Sable would have cost ABX nothing, nada, nichts. They would be piggy-backing off ASTAR. All they needed was a few 'puters and a bit of training. It's our impression that it stranded on the training side, as ABX seemed quite happy to employ what is basically trained monkey's with no real appreciation of what makes an aircraft tick, whereas an employee working with Sable need to know his, or her, shyte (so to speak).

Perhaps there is hope

Oh yes, there's hope. Hope that DHL will someday soon tell ABX management to go fornicate with themselves.

 

[EuroWheenie]

Shooter

And if you really want to go back a stretch lets talk about the other times Germans felt the need to stretch their legs across your precious EU and who went there to stand up for you.

You mean the Russians or the British? Far as I know the US were sitting on their arses for the first 2 years until the Japs decided to drop a few bombs in Hawaii.

But you are correct, we do have a lot to thank the US for - back around 60 years ago. Incidentially, do you still pay homage to the French for sorting you out when fighting for your independence?

 

[EuroWheenie]

Heavyjet

What products? The product is to get the package to the customer within a set time frame.

You must be spewing forth snippets of wisdom from the brave world of the DHL newage management manual where less in the way of on-time delivery is more and money magically generates itself from incompetence.

Viewed from such a warped perspective the old ABX business model which consistently generated profit would indeed be viewed as obsolete.

Delivering packages on time. Not very exciting I know, and totally unimaginative, but it did make money.

The only product is the package, or are you weenie inhabitants of DHL Euroworld now also offering the customer a massage upon delivery along with a nice cup of tea with the option of doing the week's grocery shop or neutering their cat?

Listen, mate, sprouting ill-informed BS only makes you look like an ignrant clown. Not saying that you are, but the words you use could lead one to have suspicions of such.

What operation Airborne and ABX used to run does not compare to what DHL is doing. It's not just a question of sending a box from a to b.

First of all, ABX was never geared to handle bigger shipments. That requires a different set-up, different ULDs and a different sorting system. All this was something ABX had to learn, but it would seem they haven't quite gotten their heads around that fact.

Secondly, Airborne never did supply chain management or designed and implemented complex logistical solutions. That's a whole different ballgame.

Thirdly there's the international aspects. ABX used to be US domestic only, now they've got to handle a large number of international import and export shipments, something they are still struggling with in the ILN hub.

Fourthly there's the whole issue of Dangerous Goods. This is a massive earner for DHL, but something ABX was, and still is, utterly inadequately equipped to handle.

Fifth, the 3rd party operators. Oh the crying we've heard from Lufthansa Cargo over the treatment they get in ILN. Handling LH shipments is different from DHL shipments; it's a different product. ABX incapable to perform to the standards expected.

Sixth, the safety standards for your workers. I was over with a team of auditors back in 2006, 2007 and will be visiting again this year. The lead auditor made a statement, referring to the ground handling standards in ILN, along the lines of "If this was a European handling agent I would have fired them on the spot". We recorded no real improvement in 2007 and to this day we're still told by ABX that "DHL standards does not apply to us" somehow still believing they own the place. With the standards they display they shouldn't even me allowed to have an opinion.

It may be true that ABX of old made money carring small packages and docs around the US, but that's not the business we're in today. And there lies the problem with ABX: We're constantly told that "we've always done it like this, it worked" and are faced with a management team utterly incapable of driving the necessary change. They will not, or cannot, get into their heads that this is not the same business anymore. Taking the overtly simplistic view that "we're just sending boxes from a to b" is not the answer to the problem.

 

[shooter]

Shooter



You mean the Russians or the British? Far as I know the US were sitting on their arses for the first 2 years until the Japs decided to drop a few bombs in Hawaii.

But you are correct, we do have a lot to thank the US for - back around 60 years ago. Incidentially, do you still pay homage to the French for sorting you out when fighting for your independence?

Most do, and the same do not if disrespectful. You should learn that if you want it in return.