DHL in talks to sell US Unit to FDX

[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....

 

[BOYCAPTAIN]

Date Of Hire

we can now fill out FDA slots!!!

 

[Box-Hauler]

we can now fill out FDA slots!!!

What are FDA slots, been watching your guy's post I and have been wanting to know what FDA stands for.

 

[BOYCAPTAIN]

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. )

out of money????? we were the target of a buyout earlier in the year by icahn and his cronies because we were going to reinvest 70% of $3.5 billion in capital spending this year aimed at expansion...he was going to pocket that money and leave the company the way it was...there is plenty on purple money around!




About 70 percent of FedEx's $3.5 billion in planned capital spending this year is aimed at expansion, according to the article.

 

[TWA]

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

Up until last year almost all TV news stations in the US were using Betamax for on locations shoots. About half still do.

 

[HeavyjetDC8]

It was just a dream.

Cornfield personnel can now safely exit their trenches, the all-clear has sounded, the Big Bad Wolf rumor was simply that.

There really should be law against it though. Life in the cornfield was never actually outstanding but it was better than working for a living. German ambition spoilt the 20th century (twice) for everyone, they seem hell bent on continuing that tradition in the 21st.



The latest.

DPWN denies that it is in talks to sell DHL to FedEx. The unsubstantiated reports were printed Thursday in Financial Times Deutschland.

Our sources have said that the rumors are simply the result of financial analyst “shop talk,” following DPWN’s recently announced plans to restructure DHL Express’s finances in the United States.

DHL spokesman Jonathan Baker was quoted in the Memphis Business Journal today saying, “There is no question about our exiting the U.S. business, a withdrawal can be completely ruled out."

The Executive Board has been in contact with every source available to determine the likelihood of such a scenario, and has been reassured that there is nothing to the FedEx and DHL partnership speculation. This is reminiscent of the rumors from last fall, when the false suggestion that UPS was buying DHL circulated.

 

[Fox-Tree]

WOW Euro
Nice Avatar - I guess I'm a leg man!!! I'm not sure I'll be the same for a while.

Now, what were we talking about?

 

[BOYCAPTAIN]

What are FDA slots, been watching your guy's post I and have been wanting to know what FDA stands for.

Foreign Duty Assignment... the DHL guys will be going to HKG and CDG .. a brilliant move by management

 

[stupidpilot]

out of money????? we were the target of a buyout earlier in the year by icahn and his cronies because we were going to reinvest 70% of $3.5 billion in capital spending this year aimed at expansion...he was going to pocket that money and leave the company the way it was...there is plenty on purple money around!




About 70 percent of FedEx's $3.5 billion in planned capital spending this year is aimed at expansion, according to the article.

Any rumors about when Big purple's going to start hiring again?

 

[BOYCAPTAIN]

Soon...to fill the empty FO slots in HKG and CDG...

 

[erichartmann]

EuroWhiner

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.

So nice of you to acknowledge you don't know how to make money in the US market.

It is also worth nothing (sp?)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.

The idea to move all in one weekend just before the holiday rush was not ABX's. They recommended against it, but did their best to make it work when ordered to proceed.

BTW, the hub worked fine for Airborne. I wonder what changed? Oh, DHL came to town with Astar.

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.

Got a newsflash for you bud. ABX is a fully independant airline. The ACMI and US law make it so. The ACMI is a contract, binding on both parties, as is the Hub Service agreement. ABX will do it as DHL asks, but when DHL was about to step on a turd ABX tried to let them know. Oh well, I guess the old saying "No good deed goes unpunished." is true after all.

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

Yep, they provided the maximum help they could in aiding the loss of all those billions of dollars.

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.

That will spell the rapid and inevitable demise of DHL in the US unless the whoever operates the US domestic business for DHL retains the DHL brand name. Somehow I doubt Fedex will be willing to do that. There is no good reason why they should. [/quote]

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).

If this actually occurs I hope you have a plan for finding a new job. You'll need it. Fedex and UPS will eat DHL alive in a matter of years.