Thinking out loud on DHL and asking a few QQ's

[shooter]

Shooter... you seem a bit testy or perhaps have had a few drinks? :beer:

Either way... here goes... DHL (in spite of your wishes to the contrary) will survive just fine with an import/export only US presence. The majority of their revenue is derived outside the US, though half of it originates/terminates in the US. Your "feelings" not withstanding, DPWN believes they'll prosper just fine under this arrangement.

As far as the election and why I brought that up? You're kidding, right? Please say you're not so naive? It's common knowledge the DHL/UPS agreement has been concluded for some time now. The anti-trust rah-rah crowd and its political hacks can't take a peek until the agreement is formalized. Let's see now... Ohio is infested with enough socialist whack-jobs to make it a "battleground state" (embarrassing but true), so the agreement won't be "announced" till after the election when no one outside Ohio will give a hoot what happens with this vendor change. Comprendo ahora?

Ay caramba!

Buenos Dias Amigo!

BBB

:laugh: "...common knowledge it has been concluded for some time now"....you are one funny guy. Pay no attention to what both DHL and UPS have been saying about them, they are done...papers signed. Lay off the hookah, BBB.

Sorry if you feel I am testy. It is just how my writings come across, maybe because I just lay it out there and don't dance around if the reader might get offended by misinterpretation. My hatred is with DHL and only DHL. They will reach an agreement, they say by the end of the year. It has nothing to do with the election, they just haven't got all the details worked out yet.

You may be right with DHL going strictly import/export. I don't think so, but we have differing opinions on it. I think UPS and FedEx will pounce like a cat on a lame mouse with that maybe by this time next year. Heck, your UPS switch site is even selling your international product as a better packaging than them right now. Wait until the domestic is all gone. I guess we will just wait and find out, eh?

And like it or not, you are wrong on the election. You give this thing way more political credit than it has with regard to the election. When was the last time you heard a national stump with Obama or McCain include DHL (exclusive) of their jobs stump? The local impact and pressure will not stop because....well, it's a bad deal. But keep thinking what you wish, if it makes you feel better. It really does make me laugh out loud. :laugh:

 

[wickedride]

Shooter... you seem a bit testy or perhaps have had a few drinks? :beer:

Either way... here goes... DHL (in spite of your wishes to the contrary) will survive just fine with an import/export only US presence. The majority of their revenue is derived outside the US, though half of it originates/terminates in the US. Your "feelings" not withstanding, DPWN believes they'll prosper just fine under this arrangement.

As far as the election and why I brought that up? You're kidding, right? Please say you're not so naive? It's common knowledge the DHL/UPS agreement has been concluded for some time now. The anti-trust rah-rah crowd and its political hacks can't take a peek until the agreement is formalized. Let's see now... Ohio is infested with enough socialist whack-jobs to make it a "battleground state" (embarrassing but true), so the agreement won't be "announced" till after the election when no one outside Ohio will give a hoot what happens with this vendor change. Comprendo ahora?

Ay caramba!

Buenos Dias Amigo!

BBB

I wouldn't bet on that, just yet.

 

[Big Beer Belly]

:laugh: "...common knowledge it has been concluded for some time now"....you are one funny guy. Pay no attention to what both DHL and UPS have been saying about them, they are done...papers signed.

Shooter... who in DHL management have you been getting your information from, or have you been relying on company press releases for the whole story? :laugh: I assumed you were a little more dialed in as far as your sources; apparently not.

You do understand no anti-trust review can occur until a deal is completed? The decision to "continue working on the deal" and not "complete negotiations" was made months ago when the political rhetoric regarding this was greater in Washington (beyond just Ohio's hack politicians.) The loss of jobs in southwest Ohio due to the change in vendors, sad as it is, has been far eclipsed by the worldwide economic crisis and its fallout. The DHL/UPS deal has fallen off the politicians' radar amid crashing markets, a worldwide liquidity crisis, bank takeovers, industry bailouts, rising nationwide unemployment, accelerating home foreclosures, soon-to-be higher inflation, and a deep, long recession (or worse).

I understand your hatred for DHL. I think you overestimate the importance of the domestic US market to their survival and prosperity. A number of transportation industry analysts believe they will continue to thrive as a very large transportation behemoth with an import/export only presence in the US. I agree with their assessment. I understand you don't. Time will tell.

BBB

 

[fob727]

Take what BBB says as gospel. He's just come down from the mountain.

 

[shooter]

Shooter... who in DHL management have you been getting your information from, or have you been relying on company press releases for the whole story? :laugh: I assumed you were a little more dialed in as far as your sources; apparently not.

You do understand no anti-trust review can occur until a deal is completed? The decision to "continue working on the deal" and not "complete negotiations" was made months ago when the political rhetoric regarding this was greater in Washington (beyond just Ohio's hack politicians.) The loss of jobs in southwest Ohio due to the change in vendors, sad as it is, has been far eclipsed by the worldwide economic crisis and its fallout. The DHL/UPS deal has fallen off the politicians' radar amid crashing markets, a worldwide liquidity crisis, bank takeovers, industry bailouts, rising nationwide unemployment, accelerating home foreclosures, soon-to-be higher inflation, and a deep, long recession (or worse).

I understand your hatred for DHL. I think you overestimate the importance of the domestic US market to their survival and prosperity. A number of transportation industry analysts believe they will continue to thrive as a very large transportation behemoth with an import/export only presence in the US. I agree with their assessment. I understand you don't. Time will tell.

BBB

Well, please inform me who in UPS management has told you the deal is done and signed. Right now what we all know....nothing new. There are rumors about the rumors right now and what I am seeing through all the fog is nothing is done, but they continue to talk and seem to have a plan B in the works (And since both plan A and plan B do not include ABX, why would I make them up?). If you know it is done and signed, enlighten us with facts and sources.

We will just have to disagree on the US market scenario.

 

[Big Beer Belly]

We will just have to disagree on the US market scenario.

Not really. There will be little ambiguity in several months.

BBB

 

[shooter]

Not really. There will be little ambiguity in several months.

BBB

Okay, until then...we will just have to disagree.

 

[Big Beer Belly]

Okay, until then...we will just have to disagree.

I feel the love Shooter!

All together now, "Kumbaya my friends... K-U-M-B-A-Y-A"!!! :laugh:


BBB

 

[EuroWheenie]

Latest rumours from this side of the pond is that the DHL/UPS deal is dead, with DHL to retreat back to CVG, dump ABX and have the flying done by ASTAR only. Further to that, ASTAR to re-fleet with 757 and 767-200SF's, aiming for a fleet around +/- 40 aircraft, serving the North American (incl. Canada) and Central American (as far south as PTY) markets only.

These are only rumours gentlemen, please don't shoot the messenger!

 

[splatt]

According 'Fortune' magazine DHL is much bigger than each of these package shippers... USPS, FEDX and UPS. DHL is huge around the world. If I recall correctly DHL is by far the biggest worldwide player in the express air delivery market. They can easily survive without the internal US market.

 

[splatt]

Fortune Global 500 rankings and Revenue:
DHL - Rank 55 REVENUE $90 Billion
USPS - Rank 83 REVENUE $74Billion
UPS - Rank 142 REVENUE $49 Billion
FEDX - Rank 214 REVENUE $35 Billion

 

[mxer]

Welcome back Wheenie. We haven't heard from you in a long time. Actually, there are a number of us that have been predicting that to happen for a while now. In esssence, DHL has eliminated a competitor. Move into town, drive the customers away with incompetance, take whats left and go back home. A great plan from those that have no idea how to compete in the US.

 

[Big Beer Belly]

Latest rumours from this side of the pond is that the DHL/UPS deal is dead, with DHL to retreat back to CVG, dump ABX and have the flying done by ASTAR only. Further to that, ASTAR to re-fleet with 757 and 767-200SF's, aiming for a fleet around +/- 40 aircraft, serving the North American (incl. Canada) and Central American (as far south as PTY) markets only.

These are only rumours gentlemen, please don't shoot the messenger!

Not attacking Euro... :uzi:

Just thinking out loud since this is the first I've heard of this rumor...

In order to provide overnight coverage to every zip code in America... let alone Canada and south to Central America... would, IMHO, require far more aircraft than 40. DHL has lost approximately 30% of its business in North America in the last 6 months (from what I've heard) so I can't imagine the volume would justify a 757, much less 767 on any single route.

Density is the key to profitability. Running a full network capable of competing with UPS and FedEx, with the multitude of guaranteed delivery times is capital intensive (read costly). When a passenger carrier's loads/yield falls below a certain profit level they have the option of simply abandoning the route. Not so in the package business. Whether you have one package or 10,000 on a route, the route must be flown in order to provide nationwide (all zip code) delivery capability to your clients. So, density is king and essential for profitability. If DHL was unable to fill many of their DC-9's before, and now business is down 30%, I can't imagine their density would make a 757 or 767 profitable on the same routes.


BBB

 

[shooter]

Not attacking Euro... :uzi:

Just thinking out loud since this is the first I've heard of this rumor...

In order to provide overnight coverage to every zip code in America... let alone Canada and south to Central America... would, IMHO, require far more aircraft than 40. DHL has lost approximately 30% of its business in North America in the last 6 months (from what I've heard) so I can't imagine the volume would justify a 757, much less 767 on any single route.

Density is the key to profitability. Running a full network capable of competing with UPS and FedEx, with the multitude of guaranteed delivery times is capital intensive (read costly). When a passenger carrier's loads/yield falls below a certain profit level they have the option of simply abandoning the route. Not so in the package business. Whether you have one package or 10,000 on a route, the route must be flown in order to provide nationwide (all zip code) delivery capability to your clients. So, density is king and essential for profitability. If DHL was unable to fill many of their DC-9's before, and now business is down 30%, I can't imagine their density would make a 757 or 767 profitable on the same routes.


BBB

I understand your confusion. Welcome to the mind of DHL. Don't be surprised they come up with something as hair-brained as 1 aircraft inbound of SAN-PHX-LBB-ICT-STL-CVG and still call it express. :laugh:

But I think you may now be seeing what I have been saying to you in this thread.

 

[TWA]

I understand your confusion. Welcome to the mind of DHL. Don't be surprised they come up with something as hair-brained as 1 aircraft inbound of SAN-PHX-LBB-ICT-STL-CVG and still call it express. :laugh:

But I think you may now be seeing what I have been saying to you in this thread.

They'll load the cans STL-ICT-LBB-PHX-SAN back to front for the return trip, and unload the entire plane at each stop. They'll say it's more cost effective by getting more work out of the ground crews.

 

[DC8CRIVER]

I believe that * IF * this turns out to be DHL's plan, they would go back to the business model that they used prior to 2002. Back then they flew to large cities only and relied on USPS, road links, and pax belly space to fill in some of the other areas. At no time did they have complete coverage to all US zip codes.

8

 

[Publishers]

What you might be missing is that the international business is not an overnight business. This is from a company that started being a courier which used to solicit passengers on international flights to take their packages as luggage.
They can put this stuff in many different modes and meet the delivery though contractors.
The big differences between all of the mentioned companies is on the ground, not in the air. UPS is one of the largest users of rail as an example.;

 

[Whistlin' Dan]

Latest rumours from this side of the pond is that the DHL/UPS deal is dead, with DHL to retreat back to CVG, dump ABX and have the flying done by ASTAR only. Further to that, ASTAR to re-fleet with 757 and 767-200SF's, aiming for a fleet around +/- 40 aircraft, serving the North American (incl. Canada) and Central American (as far south as PTY) markets only.

That sounds like a GREAT plan! If they'd come up with it in 1998, it might have been up and running by 2002 and they wouldn't be in all this trouble now.

 

[shooter]

What you might be missing is that the international business is not an overnight business. This is from a company that started being a courier which used to solicit passengers on international flights to take their packages as luggage.
They can put this stuff in many different modes and meet the delivery though contractors.
The big differences between all of the mentioned companies is on the ground, not in the air. UPS is one of the largest users of rail as an example.;

True. When you look at the model being proposed in the rumor, and look at the current loads with domestic packages still in them with the international what do you make out of it?

 

[MACHTRANSDUCER]

new delivery method?

actually, the refleet is all c-130's, slide the containers out via parachute, eliminates ground crews, apu's etc, all the containers are fitted with a gps locating marker, err, it is the germans, they are using NDB's for tracking........

 

[Publishers]

I jsut see a continual decline in domestic shipments with their focus on cities that have large international shipping prospects that can be handled in belly freight or on international FEDEX or UPS flights.
Beer Belly was talking about density but that is more important in regular air freight than package delivery. The yield off the packages is so much higher and density so much less, it is a different equation. In your time delivered product, you have to have more delivery capability to make the guarantees.
Look at it this way, a half filled FEDEX airplane generates much more in revenue than a totally filled air freight aircraft. On the other hand, more of that revenue is going to be spent on delivery than the air freight product.

 

[shooter]

I jsut see a continual decline in domestic shipments with their focus on cities that have large international shipping prospects that can be handled in belly freight or on international FEDEX or UPS flights.
Beer Belly was talking about density but that is more important in regular air freight than package delivery. The yield off the packages is so much higher and density so much less, it is a different equation. In your time delivered product, you have to have more delivery capability to make the guarantees.
Look at it this way, a half filled FEDEX airplane generates much more in revenue than a totally filled air freight aircraft. On the other hand, more of that revenue is going to be spent on delivery than the air freight product.

While there is a continual decline in domestic shipments, would most of those be due to the economy or lost customers for DHL? DHL is losing customers at grand scale because their product is not offering the service the customer requires. DHL's answer? To reduce their product even more which results in more lost customers. Even if the customer has a reduction of 30% in shipping because of the economy, DHL is losing 100% of the freight because they cant offer what the customer wants. Just my opinion, of course, but I see DHL reacting to a slumping economy by removing themselves from the picture. They can try and blame fuel, the economy, multiple airlines, ICC's but it is all them and their actions. Just my opinion.

 

[Whistlin' Dan]

I just got this from a source I generally consider relaible. Even if every word of it is true, DHL/Astar is still beset with problems as the transition will surely cost them even more customers. In short, it raises more questions than it answers. I'm passing it along for entertainment value only;

"After DHL let go 90% of its sales force last week, it has informed its National Accounts they should seek other domestic shipping options.

*DHL plans on letting the remainder of their ground network (2day/GDS etc) die with the expected loss of revenue with their recent announcement to their National Accounts.

*DHL is planning on shutting down the night sort at Wilmington on Nov 29, 2008. They have informed commerce park (the business park located next to the Wilmington hub) clients of this.

The DHL/UPS deal is reportedly dead. The two could not come to terms on a number of issues. DHL is supposedly using it as a smokescreen to insure their existing customers are serviced and have time to react to the recent announcement to seek other shipping options.

*DHL is making arrangements to move their overnight (P1) and international shipments to the old DHL Hub at Cincinnati (CVG). Reportedly sorters are being hired and electricians are on site at the to begin operations after the November 29 shutdown of the Wilmington night sort.

*Astar is reportedly providing the necessary lift for the DHL/CVG hub operation.

*There is no intention on DHL's part to 1) contract with UPS 2) maintain overnight sort operations into 2009 as claimed, or the day sort much into 2009. DHL's goal is to eliminate the ground service (P2,etc.)as quickly as possible in order to eliminate the expense of maintaining their regional hub network (ie, Allentown/ABH).

*Wilmington sort volume has dropped significantly since the DHL/UPS announcement was made in May.

*Unishippers is supposedly to begin selling UPS (they are a reseller of DHL service)

*DHL’s reported strategy is to keep quiet until the last possible moment so as to not inflict service issues upon their existing accounts by upsetting the Wilmington work force further."

 

[Bob Dylan]

I just got this from a source I generally consider relaible.

I'm not sure I would consider exdhl.com reliable.

http://exdhl.com/forums/index.php?showtopic=3628&view=findpost&p=38952

 

[rotor&wing]

Dunno Bob, but this is fact, not rumor:

All Nippon, UPS Forge International Cargo Deal, Nikkei Says

By Joi Preciphs

Oct. 30 (Bloomberg) -- All Nippon Airways Co. and United Parcel Service Inc. agreed to handle each other's international shipments to help better position each company economically, Nikkei English News reported, without citing anyone.

The agreement will help the firms focus on major markets, cut back cargo flights and increase usage rates for their aircraft, the news service said. UPS is also looking to increase orders from Japanese automakers and electronics producers.

All Nippon is expected to handle UPS shipments en route for China, South Korea and Thailand, Nikkei said. UPS will represent its partner on U.S., European and Philippine routes.

To contact the reporter on this story: Joi Preciphs in Washington at [email protected].
Last Updated: October 29, 2008 15:27 EDT

 

[Whistlin' Dan]

I'm not sure I would consider exdhl.com reliable.

http://exdhl.com/forums/index.php?showtopic=3628&view=findpost&p=38952

I didn't get it from exdhl.com. In fact, if you'll compare the time it was posted there (6:00 P.M.) to the time I posted it here (17:02), it appears quite possible that that individual lifted it from this site.

My source has access to standard industry "hotsheets" and some inside information, but no interest in either of these boards or to the operational side of the business.

 

[flyinboxes]

Ouch, wonder how that affects UPS scope or do they have any intra-asia scope? You should know Bob Dylan.

 

[hvydriver]

I"]http://exdhl.com/forums/index.php?showtopic=3628&view=findpost&p=38952[/url]

I didn't get it from exdhl.com. In fact, if you'll compare the time it was posted there (6:00 P.M.) to the time I posted it here (17:02), it appears quite possible that that individual lifted it from this site.

My source has access to standard industry "hotsheets" and some inside information, but no interest in either of these boards or to the operational side of the business.[/quote]

Actually, it shows ABXspeedyboys posted that at 5:00 pm on ex-dhl, and you posted it at 17:02 here. (17-12=5pm) 2 minutes after it was posted there.

 

[Publishers]

It has been awhile but UPS does not have the rights that FEDEX has because FEDEX got them through the purchase of Tigers.

 

[shooter]

I have seen 3 job postings for Astar just this week. I don't know why they are posting them on an industry job board rather than their own web-site. I sure hope the HR folks are not trying to be sly by posting them there as to not warrant suspicion.