Dhl

[shooter]

Okay, we all have seen the rumor mill both with DHL workers as well as media outlets reporting the future plans for them. Now, I have to laugh my freakin’ butt off when I read the article below. If DHL is getting out of the domestic (regional) work and concentrate solely on their international product, someone better tell the rest of DHL their plans. It seems the CEO of DHL Europe says the trend is for import/export to stop in the future delivery market as the world turns from globalization to regionalization. That means products would be assembled more regionally, which would mean decreased global freight. Someone must not have given him the memo. :laugh:

Within the world of logistics, the signals that moderate traffic from Asia are turning amber and, in some cases, red. DHL, the air freight and logistics operator, is hearing a new message from its Asian customers: where manufacturers were once concerned only about speed and efficient transport from Shanghai and Shenzhen to Los Angeles, London and Frankfurt, the present priority is proximity to markets.
According to Scott Price, chief executive of DHL in Europe, the global supply chain is in turmoil. Where manufacturers previously would think nothing of shipping finished goods from China to the United States and Europe, they are now looking for shorter supply chains. DHL is faced with upheaval as its clients rip apart a logistics and supply chain crafted over the past decade that was based on low-cost transport.
Mr Price reckons that the world is moving from globalisation to regionalisation. In a recent business review with high-tech companies, the customers said that rather than supply out of Asia, they were looking at assembly in Europe.
Foxconn, a Taiwanese electronics company that makes Nokia and Acer brand handsets and laptops, caused uproar this year when rumours circulated in the Czech Republic that a large PC plant was to be relocated in Hungary. In fact, Foxconn has been enlarging its footprint outside Asia, having bought assembly plants in Mexico and Hungary from Sanmina-SCI. It is shifting production out of the hotspots on China's eastern seaboard to remote provinces in northern China, while expanding assembly on the edge of European and North American consumer markets.
For DHL, that means less intercontinental freight as companies change the way in which they do business. It means product assembly close to consumer markets and the need to create new logistics hubs. According to Mr Price, the largest air freight lane last year was from China to Mexico: “Four to five years ago, nobody would have questioned their assumptions about oil. Now the price of oil forms the basis of big decisions about where to locate a factory.”

http://business.timesonline.co.uk/tol/business/columnists/article4901840.ece

 

[Publishers]

There is no big surprise in what this is saying. Recent problems with some products produced in China may or may not have exacerbated the problem but what this says is rather than China being the low cost producer, many companies are turning to Mexico and other central Europe manufactures who are equally low cost but closer to end user.
Frankly I am not sure how this relates to package business or courier business but may effect large aircraft heavy freight business. I am not sure it will effect the textile clothing business at all.

 

[shooter]

There is no big surprise in what this is saying. Recent problems with some products produced in China may or may not have exacerbated the problem but what this says is rather than China being the low cost producer, many companies are turning to Mexico and other central Europe manufactures who are equally low cost but closer to end user.
Frankly I am not sure how this relates to package business or courier business but may effect large aircraft heavy freight business. I am not sure it will effect the textile clothing business at all.

It does not say companies are turning to other manufacturers, it says manufacturers are relocating their factories. It is about supply chain and logistics in production which primarily relates to the B2B and not the B2C parcel business and that relates to the international air freight business. The B2C business would not be impacted since the end product would still be distributed from a central distribution point. i.e. the consumer would still get their China made cell phones from that Tulsa warehouse but rather than air freight flying it across the globe from the factory, it would just need to be trucked from Mexico. I don’t know why you brought in the textile industry since it always takes the slow boat from Indonesia (or other child labor countries ) to the distribution points.

So what this means for DHL, the rumor has it they just want to concentrate on international freight. That freight is primarily B2B and if the businesses are relocating their assembly closer to the end users, there would be no need for the air freight in the supply chain. That is what the production is seeing and acting upon by going regional. The whole idea makes sense but not for DHL if they just want to concentrate on international only in North America. To bad for them that the consumers do not get those cell phones from China when they order them, eh? It’s another brilliant DHL decision. BRILLIANT!

 

[erichartmann]

ABX - Future?

Things look a bit grim for ABX. The ATSG stock price is around $.35, the debt load is pretty high, credit markets are tight, and they don't appear to made much of an inroad in the non-DHL ACMI business.

Management is pointing to the pilot's CBA, saying costs are too high and there is not enough flexability in the CBA rules to permit them to operate efficiently.

Does anybody see an future for this company? What do you thing the options are? Any white knights out there.

 

[Publishers]

Excuse me Shooter, I thought of the textile business thinking about all the 747's we flew into LCK full of blue jeans and other fashions for the Limited Stores. DHL started as an International Courier and me thinks they like that business. Maybe we all read what we want but the DHL message I got was we give up. We will stick to Europe where we have been successful.

 

[AV8OR]

If this economy doesn't turm around we're ALL gonna be screwed. Read yesterday in the WSJ, that international ocean freight is tanking. Price to ship Asia to Europe ocean, a year ago $2800, now goes for $700. That can't be good for the air side.