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.

 

[Box-Hauler]

Heavyjet
First of all, ABX was never geared to handle bigger shipments.

You are correct ABX air focused on the side of air cargo that made money......... express. Why compete with Kalleta to haul a box of car parts when you can make 20 bucks for an express pack that weights a few ounces.

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

This is correct as far as I know, but is that not DHL's ball of wax. Last I heard we were only a ACMI hired to fly from point A to B, and yes we did that better than DHL did, and no we are not going to get into the whole on-time debate here.

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.

ABX did and does have haz mat authorization. If I remember correctly we had to give that the the Astar guys so they could get up to speed and carry the old Airborne customers packages.

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.

Got me there I know nothing of this, but I do know that from a pilot standpoint we treat all crew with respect and wish no ill will toward any DHL contractor, we are all in the same boat dealing with the DHL and the way they operate.

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.

I can only assume that ABX must meet all OSHA and DOT regulations and we must be doing that. As for audits we must be doing something right, ANA approved us and the Japs make the Germans look like slobs when it comes to operating systems and compliance.

It may be true that ABX of old made money caring small packages and docs around the US, but that's not the business we're in today.

Funny I though DHL bought ABX so they could have a presence in the U.S. by obtaining instant market share. Something they could not do by themselves in the past 20+ years. Agreed ABX was not into the international business, but DHL did not buy us for that reason. Would it have not made more sense to keep ABX working as is and "slowly" transition into the DHL network. You do know DHL does not know everything right. I mean if they bought FedEx and tried to operate it as they have been operating ABX/AStar for domestic ops then FedEx would be going down the craper also. The problem is they are trying to operate a European style in a U.S. environment. It will not work. Yes ABX management is a "issue" on some points but that does not explain why DHL was unable to "break into" the U.S. market before the purchase. Dhl's problem is a philosophical one not a ACMI one. They must change their corporate attitude to succeed in the U.S.

 

[shooter]

He is a pompous Frenchman, Box Hauler. It does no good to try and explain yourself. He has made himself quite clear that he is disrespectful of everything American. Yet if he were to listen to EU financial analysts they are extremely concerned about the American economy as it has a direct impact on their economy. Maybe he wiped his butt with to many of our dollars.

His posts have shown he is guilty of what he accuses ABX of; not trying to learn another's methods. That may be true on the sort side, I do not know but I doubt it. I can see ABX saying no if it will slow the sort or loading down, but if they fixed it maybe we would use it. But he has told us through his posts he does the same for his W&B system and safety methods. Somehow America has been thrown back to third world status when it comes to safety in the work place. OSHA is just letters of the alphabet to the frog, I mean French. Does he even know that his precious Sable has to go back to a central load center before the aircraft can be loaded? What a dope! That may work great with your 40 - 50 aircraft sort, but can you imagine not just our sort of just over 100 but FedEx and UPS waiting until the whole sort is done with all cans staged on the ramps before they can load the aircraft? And he thinks that is cutting edge technology? PLEASE!

Hey Frenchy, KILN is WiFi now. How about your state of the art link with it so you know what is coming off and going on the aircraft before it even gets touched. That is the way the "Big Boys" do it. You think you are one, maybe you should consider it. Oh wait, thats right you don't want to listen to how others do things? Even though ABX told DHL about that over 2 years ago.

 

[DC8 Express]

...It's our impression....

Hey Euroweenie who is "our"? Your posts makes you sound like you hang out with Dr. Z or do you have an office in Plantation?

Give us a name and your title. Other than that take your s&^# somewhere else. You talk out of your a*&

 

[EuroWheenie]

Box

ABX did and does have haz mat authorization. If I remember correctly we had to give that the the Astar guys so they could get up to speed and carry the old Airborne customers packages.

I'll take your word for it. All I heard was of serious issues with DGR in ILN. I am not surprised people were laying the blame at the door of ABX; it is a very easy mistake to make if that is indeed the case.

Got me there I know nothing of this, but I do know that from a pilot standpoint we treat all crew with respect and wish no ill will toward any DHL contractor, we are all in the same boat dealing with the DHL and the way they operate.

I have no reason not to belive that from the point of view of flight crews there is mutual respect. What I'm alluring to is everthing else.

Funny I though DHL bought ABX so they could have a presence in the U.S. by obtaining instant market share. Something they could not do by themselves in the past 20+ years. Agreed ABX was not into the international business, but DHL did not buy us for that reason. Would it have not made more sense to keep ABX working as is and "slowly" transition into the DHL network. You do know DHL does not know everything right. I mean if they bought FedEx and tried to operate it as they have been operating ABX/AStar for domestic ops then FedEx would be going down the craper also. The problem is they are trying to operate a European style in a U.S. environment. It will not work. Yes ABX management is a "issue" on some points but that does not explain why DHL was unable to "break into" the U.S. market before the purchase. Dhl's problem is a philosophical one not a ACMI one. They must change their corporate attitude to succeed in the U.S.

There is a lot of truth in that; the integration of Airborne into DHL was rushed, not thought thru and generally was a mess. The reason for this lies solely with the HQ staff in Bonn (i.e. DPWN). A lot of DHL staff had their misgivings about the rushed integration but were told to stuff it.

But that was then, and this is now. DHL works, more or less, in the same way all over the world. Just like UPS and FedEx. People all over the world can work with the US-derived procedures employed by FedUPS without too much of a problem (trust me, my mom used to work for UPS back home). Knowing this, how come that it's only in the US and only with former ABX management we have these issues? DHL has been working to the same procedures everywhere in the US, except ILN and at ABX controlled stations.

I'm not privy to how the CEO and his staff thinks, but it is not outside the realms of possibility they envisioned ABX embracing the DHL procedures, seeing as they really didn't have much of a choice. But wasn't, and still isn't, the case.

Perhaps part of the reason for the DHL failure in the US is the lack of cooperation from ABX management?

 

[EuroWheenie]

Shooter

I take serious offence to being called French. I shall therefore refer to you as being a Canadian. French Canadian even. And I do find it odd, that since we are obviously in disagreement, then I'm being disrespectful to "all things American". That is very strange, especially considering we haven't talked cars yet. Of American cars, yes I am very disrespectful (in so far as one can be respectful of a box of metal). Suffice to say I find that remark pretty immature - just because we don't agree doesn't mean I have no respect. Is that too complicated for you? Ever heard the saying "I may not agree with you, but I'll fight for your right to voice your opinion"? That, to me, sounds like a pretty good basis for an interesting conversation. Or perhaps you prefer talking only to people who agree with you?

Anyway, it is pretty obvious your knowledge of W&B operations is somewhat limited, and your understanding of what Sable can, and cannot, do is also somewhat flawed. While I can't explain it to you in every minute details, here is a short overview:

1) You do not need the weight of all ULDs etc to start loading.

2) Updating Sable with the central server takes seconds.

3) Sable can be used in stand-alone mode; it doesn't need to be connected to a server. After end of operation you connect the lap-top, and it synchronises with the server.

Just for your information, Sable handles roughly 600 flights a day, all from the same central server. It has been tested simulating LEJ 2012 with 100+ flights. 10 load controllers was able to produce all Load Sheets and Load Plans in time - Sable did not fall over.

ABX was offered Sable with a WiFi option, free of charge even. They still said no.

As for safety on the ramp in ILN, I can only compare it with what I've seen myself, and the only thing close to ILN standards I've experienced was in Africa, Afghanistan and Iraq. If that's approved US standards, well, good for them - but not good enough for DHL.

 

[EuroWheenie]

DC8

"Our" in the context of "us Eurowheenies on the other side of the pond", generally speaking. Anybody, really. Everybody I've ever spoken to, as a matter of fact. Anybody who's had dealings with ABX, anyone who's been to ILN. All and sundry.

Sadly, Dr. Zumwinkel seems to have misplaced my email and thus rarely consults my opinion before making a decision. I shall endavour to rectify this obvious mistake at my earliest inconvenience.

And there are 2 chances of me revealing name and title on this here board; fat and none. Same as you I suppose.

 

[shooter]

Shooter

I take serious offence to being called French. I shall therefore refer to you as being a Canadian. French Canadian even. And I do find it odd, that since we are obviously in disagreement, then I'm being disrespectful to "all things American". That is very strange, especially considering we haven't talked cars yet. Of American cars, yes I am very disrespectful (in so far as one can be respectful of a box of metal). Suffice to say I find that remark pretty immature - just because we don't agree doesn't mean I have no respect. Is that too complicated for you? Ever heard the saying "I may not agree with you, but I'll fight for your right to voice your opinion"? That, to me, sounds like a pretty good basis for an interesting conversation. Or perhaps you prefer talking only to people who agree with you?

Anyway, it is pretty obvious your knowledge of W&B operations is somewhat limited, and your understanding of what Sable can, and cannot, do is also somewhat flawed. While I can't explain it to you in every minute details, here is a short overview:

1) You do not need the weight of all ULDs etc to start loading.

2) Updating Sable with the central server takes seconds.

3) Sable can be used in stand-alone mode; it doesn't need to be connected to a server. After end of operation you connect the lap-top, and it synchronises with the server.

Just for your information, Sable handles roughly 600 flights a day, all from the same central server. It has been tested simulating LEJ 2012 with 100+ flights. 10 load controllers was able to produce all Load Sheets and Load Plans in time - Sable did not fall over.

ABX was offered Sable with a WiFi option, free of charge even. They still said no.

As for safety on the ramp in ILN, I can only compare it with what I've seen myself, and the only thing close to ILN standards I've experienced was in Africa, Afghanistan and Iraq. If that's approved US standards, well, good for them - but not good enough for DHL.

Personally, I don’t care about theSable system. It is really of no concern as it is not being used. Now, if DHL chooses to continue the US operations then the next step would be where and with what. What I do know about the Sable system is that it does not work in its current configuration when you have over 100 aircraft on a ramp for the sort. It is slow and delays loading. So if DHL chooses to continue in ILN and they decide to take over the sort, then they can tell ABX to use the Sable system and I am sure ABX will comply 100%. ABX does not fight DHL like you say they do. But if ABX is responsible for the sort and loading then they will do it in the most proficient way they can for their customer whether that is DHL or Postal Service hubs they operate. You see, ABX is very well versed in running large sort operations, something DHL has never had before here in the USA. When they are responsible for extreme departure delays by your Sable, then who will you blame? I am not saying it could not be made to operate efficiently, but it has not been proven. And you can SAY it can handle whatever, but actual results proved different. Like I said, when DHL is responsible for the sort and loading, I am sure ABX will comply. DHL did not listen when ABX told them to not handle the integration as they did and ABX was right. ABX does what DHL wants at every turn unless it is something DHL will try and hold against ABX when ABX knows it has not proven to work. All of this may not mean squat in a few months anyway. But maybe we will see when/if DHL takes the sort operation from ABX. Will you be around here then? Anyway, my issue was with your comments about our country. Maybe our dollar will be on the up and you can stop putting it down as well. How about if I say please?

 

[mxer]

Euro,
If I am not mistaken, I think you may have described a major part of the problem. When you say that DHL works the same in all parts of the world with success except in the US market, you are hitting the nail on the head. The market here is different. That is a function of the American consumer. DHL has to conform to the consumer instead of the other way around. That is why they purchased Airborne to begin with. Airborne, even with it's problems in the later years was successful in a market that DHL Airways was not. I would imagine that FedEx and UPS both understand the different consumer in the States versus other parts of the world. ABX may have its issues but the fact remains that the market share with DHL calling the shots in the US is shrinking. You have to supply what the express customers in the US desires in order to be successful in the US.

 

[EuroWheenie]

We disagree over what Sable can and cannot do. Fair enough, time will tell.

Besides, since the head boffins has told us they ain't going to sell DHL US to anybody, this thread may have run its course.

How about if I say please?

Then I'd buy you a beer! Yes, I'm in ILN around April/May. Do they still allow smoking at the Buffalo Wild Wings?

 

[EuroWheenie]

MXer

You may be absolutely right, I don't profess to know the US market very well. I only hear the bitching about ABX, and relay what I've experienced myself.

But the DPWN guys say they want to run DHL like a MickeyD; same Big Mac whereever in the world you order it. You and I may disagree, but if the owners of the trainset tell you to play with it in a certain way, it does seem counter productive insisting not to - and therein lies our issues with ABX.