Monday, November 10, 2008


From Businessweek:

DHL to Halt Express Deliveries in the U.S.
Deutsche Post's U.S. division will also close its 18 main distribution hubs and lay off most of its workers in the country

Package delivery company DHL may have conquered the world, but it admitted on Nov. 10 that it couldn't conquer the U.S. The unit of Germany's Deutsche Post (DPWGN.DE) announced it will stop making express deliveries within the U.S., close all of its 18 main distribution hubs there, and lay off all but a few thousand of its remaining 13,000 U.S. workers.

DHL has lost nearly $10 billion in the U.S. in the five years since it purchased Airborne Express in an attempt to challenge FedEx (FDX) and United Parcel Service (UPS). Despite its dominance in the rest of the world, DHL was never able to take enough share from the two major carriers in their home market. The company's decision to largely withdraw from the U.S. will push parent Deutsche Post to an estimated $1 billion loss for the full year as it books writedowns totaling $3.9 million to cover severance payments to workers and other restructuring.

UPS has been hurting as well, but existing the market completely?

I have talked about the problems DHL has faced back in May and the possibility of closing shop and merging with UPS was very real.
13,000 U.S. workers real.
12 million SF of warehouse space real.

I guess the takeaway message is to focus on what you are good at, although all those inefficiencies paid a lot of bills for a lot of people in the past.

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