DHL reboots in US after $9.6-B ‘disaster’
USA -- Deutsche Post AG’s DHL Express unit is rebuilding its US operations around international shipments after a $9.6 billion “disaster” in domestic deliveries.
After firing 15,000 people and closing 75 percent of its outlets in 2008, DHL Express US is expanding and may beat the volume goal it set that year by 15,000 packages a day in 2011, Chief Executive Officer Ian Clough said in an interview.
DHL Express abandoned efforts to challenge United Parcel Service Inc. and FedEx Corp. for deliveries on their home turf. It now handles only foreign shipments in the US, with sales of about $1 billion a year moving goods such as Dell Inc. computers and Amazon.com Inc. books. Clough said that toehold in the world’s biggest economy is pivotal for its global network.
“There are countries in the world where you might say ‘That’s not necessary,’” said Per-Ola Hellgren, an analyst with Landesbank Baden-Wuerttemberg in Mainz, Germany, who recommends buying Deutsche Post. “But the US is still a must-have country.”
Routes to and from the US help the unit compete in a global air-cargo market that the International Air Transport Association trade group says will generate $68 billion in 2011. That total, 15 percent more than the tally for 2007 before the recession began, includes cargo flown in passenger jets.
DHL Express US is investing $40 million in its Cincinnati airport hub and improving service by delivering a majority of packages by noon, Clough said. Bonn-based Deutsche Post doesn’t disclose profit by country, said Bea Garcia, a spokeswoman.
US daily volume of as many as 115,000 international packages exceeds a projection of 100,000 set in 2008 when DHL Express dropped its domestic business, and is now growing at more than 10 percent annually, Clough said in the interview.
That figure compares with a daily load of about 1.2 million parcels before the pullback, which was partly driven by the “massive weakening” in the global economy and mounting losses after DHL Express cut US rates in a bid to win market share, Deutsche Post said in November 2008.




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