DHL in the US - Latest

[abxaviator]

Post 1 of 1 for Mach88/Eurowheenie

 

[shooter]

I appreciate Euro's insight. I think the info. he posted is plausable. Lets face it if the UPS deal falls apart, which is likely, DHL will have to continue using ABX and Astar 767s, A300s and DC8s at least for a while. At some point they will pick one airline or the other but from what we have all seen it takes DHL a long time to make decisions. Either way, ILN is not an option for the few flights they are operating now.

I take the part about ABX screwing things up for DHL with a grain of salt. I am sure there is some truth to it but it may be exagerated.

As for the 40,000 lay offs, I think that may be an accurate number. He said INCLUDING contractors. DHL had 40,000 direct employees and I think about 25,000 of contract employees in the US.

Why would ILN not be an option for them? Not that it matters, I just would like to know how ILN is not feasible. Of course they would still have to dump it since it is costing them $$$$. But if they did dump it off to the state in exchange for landing fees to the property value, how would that not actually work to their favor to stay put?

 

[Whistlin' Dan]

Why would ILN not be an option for them? Not that it matters, I just would like to know how ILN is not feasible. Of course they would still have to dump it since it is costing them $$$$. But if they did dump it off to the state in exchange for landing fees to the property value, how would that not actually work to their favor to stay put?

Because it's not cost-effective to keep a facility the size of ILN open just to service 15-20 flights a day, 5 days a week? From what I've been told, the CVG hub had some problems, but was more than capable of handling 100,000 shipments per night.

Whatever flying is left will probably be put out to bid.

 

[Mach88]

Thats right Dan. It wouldnt be feasible for the state to takeover the airport and maintain it so DHL could operate about 100 flights a week and employ about 1,000 people. The only way the state would do that is if they could attract other airlines to the airpark. And with ILN being such a small town and the fact that there are at least 2 other underutilized airports within an hour and a half drive, that is very unlikely.

 

[shooter]

My thoughts are they would not need the whole sort. They would just use the new F sort building and let the state do whatever they want with the rest of the property. I still don't see how it would not work to their advantage to stay. But thats them...their show...whatever.

EDIT: Plus, if the state breaks a good deal ABX could base their MRO there. So there are 2 large tenants, Roberts has his corporate jet there. Hey TWA, what do you think? Do you think if ILN became a public airport would some people you know locate their GA aircraft at ILN? And then you have Great Oaks that has a large A&P school there already. Maybe they would start a pilot school there as well.

I do not throw out that ILN could remain an airport at all.

 

[abxaviator]

Whichever airline(s) will be doing the job will integrate fully with the way DHL does business in the rest of the world. No C-cans; adopting the same rules, procedures and standards as everyone else. Note, I'm not talking about the actual flying SOPs here, "just" everything else.

Article from International Freighting Weekly:

Posted: 21-11-2008

DHL 'got it wrong' in US
Company regrets not keeping Airborne Express management after integration

By Will Waters



DHL has finally admitted to mistakes that contributed to the company’s US$10bn failure in the US domestic express market.


Following this month’s decision to withdraw early next year ( IFW , 17 November), a spokeswoman told IFW that it had learned major lessons from the experience of integrating US firm Airborne Express, which DHL bought in 2003.


"One big lesson was that the management of Airborne Express should have been kept, " she said.


It was something the company had already learned and applied, she added.


"If you look at the integration of Exel, we kept John Allan as the head of the logistics business and that integration has been very successful."


A former senior Airborne executive told IFW that DHL executives - many of whom had recently joined from TNT - took over the running of Airborne, with "a lot of international freight experience, but their domestic air freight knowledge and experience was limited, at best.


"Would it have made the difference [between the success and failure of DHL’s US operations]?


"Who knows for sure? But one could argue that it wouldn’t have been nearly as bad if they had left the Airborne team intact." He said prior to the acquisition, DHL USA was losing around $200m-$250m per year, while Airborne posted $6m profit.


"When they combined both, instead of heading towards the black they started almost immediately losing a lot more money, and it never stopped getting worse." DHL expects $1.5bn losses for its US express operations in 2008, which it hopes to bring down to $900m in 2009, stabilising at a $400m annual loss by 2010.


Another key lesson was the importance of remaining close to customers, said the DHL spokeswoman, "in order to give them what they want rather than what you think they want."

Guess they really didn't learn any lessons.

 

[EuroWheenie]

There are obviously two different sides to the stories - the one we're hearing on the eastern side of the Atlantic, and another one going around on the western side.

To a very large extent, I'm perfectly willing to belive what we've been told might very well have been drivel fed to us by incompetent managers - it would hardly have been the first time. However, since the director of JFK is a personal friend of mine, I've no reason to belive he'd lie to me with regards to the christmas schedule story I related earlier.

However, what's done is done and it's time to look forward. I'm hoping that the future of DHL iin the US will work better than the past, and do wish to extend my very best to all those who'll be tasked with the task of making it work.

I shall not spend any more time pointing fingers and playing the blame-game for things that happened in the past. I will try, to the best of my abilities, to present the picture as it's been given to us over here, and relay what I can to you guys as and when it happens.

PS
Do feel free to do an IP check; I don't suffer from any split personalities on this site, and as thus am only posting under this username.

 

[shooter]

I am not saying your friend lied to you, but he was lied to or misinformed. ABX does not cancel DHL network flights or make them go if DHL did not want them to fly. There are times pointed out to you earlier where our past experience would have us cancel a flight for operational reasons. But those ideas are passed to DHL NCG to make the decision. I would almost give it a 100% factor that whatever we suggested, NCG did the exact opposite.

 

[TWA]

I know some people that would definitely be interested in using the airpark, should it become open to the public.

With Wilmington's current efforts of attracting industrial businesses, the airpark will become a great location to base a corporate jet. If it opens up to the public, they need to either allow private companies to build hangars, or build more themselves.

 

[RiddleEagle18]

Ive got a friend in upper management at DHL. He keeps telling me that CVG is leading the pack to handle all of the shipments.

Just to confirm that they are looking hard at it. I had recurrent in cvg a couple weeks ago and there was about 20 management guys in DHL shirts eating at the Holiday Inn right next to the sort facilitie. Called my buddy and he said it was the big wigs making "huge deceisions."

 

[mxer]

Ive got a friend in upper management at DHL. He keeps telling me that CVG is leading the pack to handle all of the shipments.

Just to confirm that they are looking hard at it. I had recurrent in cvg a couple weeks ago and there was about 20 management guys in DHL shirts eating at the Holiday Inn right next to the sort facilitie. Called my buddy and he said it was the big wigs making "huge deceisions."

Big wigs making huge decisions. What a joke! The idiots that would make that decision are not likely in Kentucky any more than they eat at Holiday Inn.

 

[nitefr8dog]

Ive got a friend in upper management at DHL. He keeps telling me that CVG is leading the pack to handle all of the shipments.

Just to confirm that they are looking hard at it. I had recurrent in cvg a couple weeks ago and there was about 20 management guys in DHL shirts eating at the Holiday Inn right next to the sort facilitie. Called my buddy and he said it was the big wigs making "huge deceisions."

Huge decisions for DHL big wigs would be where to put gas in the rental car!

 

[GoABX]

As a pilot and International DHL customer, how will the domestic portions of an International Express shipment be picked up and delivered if there is not domestic service??? Are my 3-4 day express shipments now going to take 7-9 days.

As a point of customer service, I never received any notification that domestic service was being terminated.

 

[DC8CRIVER]

As a point of customer service, I never received any notification that domestic service was being terminated.

You may want to check the news about DHL every now and then.

http://money.cnn.com/2008/11/10/news/companies/dhl/?postversion=2008111010

"DHL TO CUT 9,500 U.S. JOBS
The firm will end deliveries within the U.S., but will continue shipments to other countries."

It's been in the news continuously since last November when DHL announced their stateside suicide.

 

[TWA]

You may want to check the news about DHL every now and then.

http://money.cnn.com/2008/11/10/news/companies/dhl/?postversion=2008111010

"DHL TO CUT 9,500 U.S. JOBS
The firm will end deliveries within the U.S., but will continue shipments to other countries."

It's been in the news continuously since last November when DHL announced their stateside suicide.

Yes, it was in the news, but DHL never notified their current customers of the service change. Bad customer service, but not surprising.

 

[Whistlin' Dan]

As a pilot and International DHL customer, how will the domestic portions of an International Express shipment be picked up and delivered if there is not domestic service??? Are my 3-4 day express shipments now going to take 7-9 days.

"DHL's 9,500 job cuts are on top of 5,400 job reductions announced earlier this year. After these layoffs, between 3,000 and 4,000 employees will remain at DHL's U.S. operations, the company said.

The company also said it was shutting down all ground hubs and reducing the number of its U.S. stations to 103 from 412."

 

[flyboyike]

The revenue will be decreased by roughly 92%(!), with an expected daily volume of around 100K shipments, down from around 1.5 million.

Why not just shut down completely?

 

[Propsync]

Why not just shut down completely?

Because DHL Europe has to offer service to the US in order to attract more shippers. If they keep 103 stations in the largest markets of the US, they can say they cover, say 70 percent of the US population (Don't know the real number). They may lose money, I think I saw somewhere in this thread 200 mil a year. But those accounts might go somewhere else if that service isn't offered. I guess I liken it to the grocery store selling toilet paper cheap to get people in the door. I believe the term is loss leader.

 

[SiouxMD11]

So you think ABx will get the contract with help from Ohio?

 

[nitefr8dog]

So you think ABx will get the contract with help from Ohio?

Who are you asking that question to?

 

[sqwkvfr]

Tell them I said to not let the door hit them in arse on the way out of the US. Oh, and tell them I have some extra Federal Express envelopes if they ever desire for anything to actually get where it needs to go. They have management that actually knows how to run a cargo business.

I've gotta echo this sentiment, and I understand that the conversation has gone on further at this point, but a member of my immediate family lost her job at DHL recently. She says that so many customers, business partners, contractors and vendors were so turned off by the arrogance and lack of flexibility shown on DHL's part coupled with the horrible service provided by DHL's ground contractors that she found working their a very frustrating experience.

And, no, she wasn't a courrier...she was a CVA Integration Manager. Fortunately, many of her customers who subsequently turned to USPS for their express shipping needs demanded that USPS hire her.

She started her new federal job early last month.

DHL USA was fugged up from the word "go." Many people tried to tell the home office, but they didn't listen.

 

[flyboyike]

Because DHL Europe has to offer service to the US in order to attract more shippers. If they keep 103 stations in the largest markets of the US, they can say they cover, say 70 percent of the US population (Don't know the real number). They may lose money, I think I saw somewhere in this thread 200 mil a year. But those accounts might go somewhere else if that service isn't offered. I guess I liken it to the grocery store selling toilet paper cheap to get people in the door. I believe the term is loss leader.

I hear you, but to use the entire US market as a loss leader?

 

[Box-Hauler]

Yeah but they were gonna make it up on volume..... (ha ha)

 

[Propsync]

I hear you, but to use the entire US market as a loss leader?

Maybe loss leader was the wrong term, but the thought still carries. If DHL cuts out the US, maybe 3 of the top 20 shippers go to UPS or Fedex. That might be tens of millions of dollars. So instead they provide a population segment of the US market to keep those shippers satisfied and keep them in their own wheelhouse, Europe.

That's partly where the logic failed. Losing 200 million a year on the US and Airborne making a small profit was not going to make it profitable together. Coupled with a media blitz and lack of profitable market share (I bet many accounts were signed for a loss), the end result was this. I feel for the Airborne employees that worked hard to build a respectable product to have it destroyed by someone else. Not the way I would like to bow out.

 

[ABXbooger]

Problem with your logic is you still think DHL is swinging the big stick on the international segment. Fedex and UPS have seen almost all of their growth from the last couple of years come from the International segment. They are gonna eat DHL's lunch within 5 years. Period. No reason to ship DHL anymore when Fedex and UPS do the same thing, only better...

 

[hvydriver]

Problem with your logic is you still think DHL is swinging the big stick on the international segment. Fedex and UPS have seen almost all of their growth from the last couple of years come from the International segment. They are gonna eat DHL's lunch within 5 years. Period. No reason to ship DHL anymore when Fedex and UPS do the same thing, only better...

True Booger...true.....

 

[Golden Falcon]

Don't know about states side, but the one major difference between DHL and the others overseas was the product...it ranged from overnite letters to bulldozers..if it could be disassembled and put on a plane, truck, camel,donkey or barge whatever.. DHL would ship it..ANYWHERE...this is from personal experience having flown for them 12 years...

 

[RiddleEagle18]

Big wigs making huge decisions. What a joke! The idiots that would make that decision are not likely in Kentucky any more than they eat at Holiday Inn.

Told ya! http://wnewsj.com/main.asp?FromHome=1&TypeID=1&ArticleID=175980&SectionID=38&SubSectionID=123

 

[mxer]

Told ya! http://wnewsj.com/main.asp?FromHome=1&TypeID=1&ArticleID=175980&SectionID=38&SubSectionID=123

You Da Man! I stand corrected. I guess DHL big wigs DO eat at Holiday Inn.

 

[AC560]

Remember - 六四屠城

I am guessing the board doesn't get a lot of Chinese readers let alone people who would know the relevance of 64. Seems an odd tag line for this forum.