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

[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........