DHL, USPS, FedEx to Cooperate

[mxer]

I just read it. Thats how it sounds to me as well.

 

[abxaviator]

Video Conf just ended, and that's exactly what they said.

 

[Browntothebone]

Here is a press release from UPS


UPS To Provide Lift For DHL Air Express Packages in North America

ATLANTA--(BUSINESS WIRE)--UPS (NYSE:UPS) today announced it will work with DHL Express U.S. toward an agreement to provide transportation in its air network for all of DHL’s express, deferred and international package volume within the United States. UPS also would provide air lift for DHL packages between the United States, Canada and Mexico.

A final contract is anticipated later this year. The agreement, when finalized, would be expected to extend for 10 years and produce up to $1 billion in additional annual revenue for UPS. The company said it would begin phasing in a limited amount of volume in 2008 with ramp up in 2009.

“We believe this arrangement with DHL would represent a wise use of our assets and network capacity while creating a substantial and profitable revenue stream for our company,” said David Abney, UPS’s chief operating officer. “We plan to move forward quickly on the final contract.”

The agreement would not involve the pick-up or delivery of DHL packages to their customers, only the transport of packages, primarily between airports, in North America. As such, the work will be similar to that currently performed by UPS for the U.S. Postal Service.

UPS will be able to handle much of the anticipated new volume in its existing air network, although additional capacity will be added beginning in 2009 upon full implementation. The total amount of capacity needed will be determined at that time; however, UPS is currently scheduled to take delivery of seven new aircraft in 2008 and another five in 2009. The company is also well along on a $1 billion expansion of its UPS Worldport® air hub in Louisville, Ky.

The arrangement with UPS is part of a broader U.S. restructuring announced today by Deutsche Post World Net at a press conference in Bonn, Germany.

“We want to emphasize that this would be a relatively straightforward air lift agreement and that UPS and DHL will continue to compete in the marketplace under their own brands,” Abney added. “UPS brings to customers its own unique value proposition. By providing these services to DHL, UPS will not be diminishing its competitive position or ability to differentiate itself with customers.”

 

[EuroWheenie]

Bad News For ASTAR and ABX

Dear Colleagues,

As you all know, the Group management together with the U.S. management have been working on finding a solution to the challenges in our DHL U.S. Express business for quite some time now. We entered the market years ago with significant investments to rapidly expand our business and become a strong third player in the extremely complex and competitive U.S. express market. At the time, our strategy was certainly the right one; however, due to unacceptable losses and very difficult market conditions, we had to make a clear decision that would improve the situation in a sustainable way. We owe that to the shareholders of Deutsche Post World Net, but we also owe that to our customers and employees. Especially the latter need the security that only a sound and profitable business provides. Today, the Supervisory Board and the Board of Management have agreed on a number of significant measures.

To start with the most important message: We are firmly committed to the U.S. market. I’ve always said that and today it’s been reiterated. A strong presence in the world’s largest express market is indispensable for our success globally. International customers need a service provider that covers the U.S. market; and DHL needs such customers since without them the margins in our international express business would suffer severely.

So we will stay in the U.S., but we will restructure our U.S. Express business, reorganize our network to reflect the actual market requirements, cut costs significantly and start anew with a realistic and pragmatic approach.

A careful analysis of the extremely difficult situation clearly showed that only significant changes in the previous structure would lead to success. As a result, one of the main solutions is the future aviation outsourcing with UPS. DHL and UPS have agreed to develop a contract that will provide the airlift capacity for our domestic and international express products within the United States and North America. The contract is intended for 10 years. We would expect a small volume of air lift will begin later in 2008 with a full ramp up in 2009.
In a further step, we will streamline our entire network and discontinue transports that customers don’t ask for, close or consolidate remote branches, reduce our pick-up and delivery routes, and tighten our ground transport network. In many cases, our goal is to reduce the high cost of service to scarcely populated areas of the U.S. This means that the impact on our customers will be kept to a minimum. After all, there will be no changes in the U.S. express product portfolio, and DHL will deliver shipments in all places that it is serving today.

All in all, we intend to achieve cost savings of around $800 million in 2010 and around $1 billion in 2011 and expect underlying EBIT to improve accordingly, fulfilling a key commitment made in our capital markets program Roadmap to Value. The capital market judges us – and justifiably so – on the basis of whether and how we tackle the weak spots in our financial performance. And you know that this very successful program plays a critical role in our credibility and in the trust that is placed in the Group.

In addition to delivering on our commitment in the Roadmap to Value, our work is driven by the realization that we want to and must reinforce the long-term existential basis of our U.S. Express business in order to remain active in this extremely important market. Local DHL management will describe in a timely, open and transparent manner how this will be done in detail and how each measure will be implemented in the United States.

In the process, it is very clear to us and me that the decision cannot be carried out without job reductions and the personal difficulties associated with them. This information will also be communicated to all affected parties in the most timely, careful manner possible. I pledge to all affected employees in the United States that I and we will do everything within our power to carry out this challenging process as fairly as possible.

At the same time, I urge you to commit yourself to the successful implementation of this plan, drawing on your individual strengths and your complete loyalty to the company in the process. We all have this one opportunity for a fresh start, for a realistic and pragmatic new beginning in our U.S. Express business – and we intend to and must use this opportunity in the interest of every one! We are thoroughly convinced that we have found the key to long-range improvements. I am counting on all people who are directly or indirectly affected to ensure that this solution is vigorously implemented with their eyes firmly fixed on our stockholders, our customers and, above all, our long-range market presence in the United States.

Best regards,
Frank Appel

 

[TWA]

WOW

 

[hvydriver]

Bad News For ASTAR and ABX

Like I said awhile back Euro, The Germans have destroyed DHL in the US. Congrats!

 

[TWA]

I have to ask, how many pilots are actually going to hang on til the very end?

 

[nitefr8dog]

I feel sick just reading this!

 

[hvydriver]

I have to ask, how many pilots are actually going to hang on til the very end?

Who knows? It's not like there are a ton of jobs out there right now.

 

[abxaviator]

DPWN says this is a "win-win" for them and UPS. I get that UPS wins an additional $1B annually for doing little more than they do now, but how does DPWN win? For 2007 they paid ABX $1.08 B for their services and some amount to Astar, so the outlay for DPWN stands to go down, but they have always INSISTED on have complete control of day-to-day operations decisions, I don't see UPS bowing to constant demands for schedule changes, etc. from DHL, still a competitor.