DHL is Done

[chipwich]

Another victim of the recession.  DHL tried to join in the US parcel express express business and it didn't work out too well for them.  I guess they are back to shipping parcels to Equitorial New Guinae, Zanzibar and other far off places that UPS and FedEx won't go.]

The layoffs are going to further weaken the economy.  I imagine things willl continue to worse for a while until they get better.

Deutsche Post to cut 9,500 jobs in US
Monday November 10, 2:18 pm ET
By George Frey, AP Business Writer 
Deutsche Post to cut 9,500 jobs from DHL unit in US, end U.S.-only express shipping


FRANKFURT, Germany (AP) -- Citing heavy losses and fierce competition, the overnight-delivery giant DHL is cutting 9,500 American jobs and significantly reducing its air and ground operations in the U.S., largely leaving the field to FedEx, UPS and the Postal Service.
ADVERTISEMENT


The cuts are part of a wider plan to curtail operations in the U.S., including domestic ground and delivery services, though DHL's international shipping to and from the U.S. would continue.

DHL's parent company said the new round of cuts are on top of another 5,400 job cuts already announced and blamed heavy losses at the unit, which competes with rivals UPS Inc. and FedEx Corp. The DHL Express unit currently employs some 18,000 workers.

Investors at Deutsche Post, the Bonn-based owner of DHL, cheered the decision, sending the company's shares up 7 percent to 10 euros ($12.90) in Frankfurt trading.

Still, Deutsche Post said the U.S. remained a key market and that its other operations there, including freight and global mail and other logistics, won't be affected by the closings.

Deutsche Post's U.S. logistics unit employs more than 25,000 workers in the U.S.

Part of the plan calls for the halt to domestic shipping by Jan. 30, after the company closes all of its ground hubs and reduces the number of service centers to 103 from 412 across the U.S., it said.

At a press conference, company officials, including chief financial officer John Allan said the job cuts and location closures would be "clear across the country," without being more specific.

"The retained U.S. international Express network with a total of 3,000 to 4,000 employees will be tailored to the needs of the group's international Express service customers," the company said in a statement. "All international shipments into the U.S. will still be delivered, while 99 percent of the outbound shipments will be picked up."

Deutsche Post's decision is expected to reduce operating costs at the U.S. Express unit from $5.4 billion (4.2 billion euros) to less than $1 billion (770 million euros).

"The international Express offering in the U.S. will be maintained on today's levels and the region will remain an integral part of DHL's global Express network," the company added.

Deutsche Post said it expects to spend another $1.9 billion (1.5 billion euros) on the restructuring, bringing the cost to $3.9 billion (3 billion euros) over two years. Most of that will be booked this year.

Because of the restructuring, Deutsche Post said the total losses at its U.S. Express business would reach $1.5 billion (1.2 billion euros) for the year.

The decision was announced as Deutsche Post said its third-quarter net profit more than doubled to 805 million euros ($1 billion) compared with 350 million euros a year earlier. Sales rose 4.1 percent to nearly 14 billion euros ($18 billion).

[thelakelander]

What cities are home to DHL's largest US operations?

[gatorback]

Bangalore, Karnataka India.  The made their money sending packages from the US to India.  Now that Obama is ending tax credits for corporations that send jobs overseas, DHL is smart to exit now while they still have some money left for the priciples.

[gatorback]

DHL is in every US city that does business off-shore.

[thelakelander]

Looks like Wilmington, DE will be hit pretty hard.  Their hub employs 8,000.

The toll in Wilmington has been estimated to be about 8,000 jobs, where ABX Air and ASTAR Air Cargo currently provide air cargo transport services for the company, and ABX operates DHL’s privately owned airport, Wilmington Air Park.

full article: http://jacksonville.bizjournals.com/jacksonville/othercities/cincinnati/stories/2008/11/10/daily1.html

[gatorback]

Did DHL operate it's own Air Cargo planes?  Seems they did.  Wonder what part high fuel cost effected them.

[thelakelander]

Yes, DHL operates their own air cargo jets.  Here's a link to an article where DHL signed a $1.3 billion deal with Boeing for 44 757s in 1999.

www.aeroworldnet.com/1ls10119.htm

[thelakelander]

The trickle down effect will probably have an impact on Boeing, other supplies and aircraft maintenance companies.

[chipwich]

Yes, until a couple of years ago, DHL only operated as an international shipper that sent parcels between the US and foreign countires.

They then bought out Airborne Express, who was an express air parcel carrier.  In order to not violate any US domestic protection laws, DHL bought Airborne and that gave them an the ability to operate air freight within the US.

They basically repainted Airborne Epxress planes and tired to be like FedEx and UPS.  They just couldn't gain enough traction and the slowing economy was enough to finish off their new domestic company.

[adamh0903]

For the past 6 months UPS has handled all their air frieght

[fightingosprey07]

Looks like Wilmington, DE will be hit pretty hard.  Their hub employs 8,000.

The toll in Wilmington has been estimated to be about 8,000 jobs, where ABX Air and ASTAR Air Cargo currently provide air cargo transport services for the company, and ABX operates DHL’s privately owned airport, Wilmington Air Park.

full article: http://jacksonville.bizjournals.com/jacksonville/othercities/cincinnati/stories/2008/11/10/daily1.html

Actually, their hub is in Wilmington, Ohio not Delaware. According to Wikipedia, the population as of 2000 was under 12000. So a loss of 8000 jobs may very well be the end of the town.

[thelakelander]

Sorry, right city name, wrong state.  This is a huge blow for that community.

[adamh0903]

For the past 6 months UPS has handled all their air frieght

Let me correct myself after talking to a friend that works for UPS. They signed a contract to handle their freight about 6 months ago, but conrgress has been debating it for months. Looks like it doesnt matter now, word at UPS is they knew this was coming for months

[ProjectMaximus]

So DHL is only shutting down most of its US operations.

Perhaps the title should be changed to "Wilmington is done?"

[chipwich]

Perhaps the title should be changed to "Wilmington is done?"

Yah, definitely, it looks like Wilmington is done like a baked potato.