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DHL's Big Annoucement on Wednesday
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<blockquote data-quote="worldwide" data-source="post: 344370" data-attributes="member: 2193"><p>"Stock analyst Ed Wolfe predicted on May 16 in a research note that DHL could close as many as 90 to 100 of its U.S. terminals, return to its previous life focusing on international service and outsource local deliveries to trucking firms and the U.S. Postal Service.</p><p></p><p>Wolfe reported that as early as July DHL could begin closing sort and distribution terminals, which tend to combine ground and air products. DHL's big air hub in Wilmington, Ohio, is likely to survive the cutback.</p><p></p><p>The analyst also forecast that DHL is likely to partner with USPS for last-mile delivery for small ground shipments, and may rely on YRC Worldwide (parent of Yellow Transportation and Roadway among others), FedEx Freight or other motor carriers for line haul delivery between its remaining terminals and USPS local drop-off centers, known as Destination Delivery Units, or bulk regional centers.</p><p></p><p>The logical place for DHL to outsource is USPS, he said, because it has the lowest cost and they already have a relationship through the DHL @Home Service to do residential last-mile delivery. Under such a scenario, DHL could concentrate delivery operations in large cities, leaving to its partner smaller cities and rural areas where there is limited business but lots of territory to cover.</p><p></p><p>Wolfe warned that DHL could soon run into service problems with its most demanding customers. "We believe these restructurings will likely lead to untenable service levels for many current DHL Express and Ground customers, and a material amount of existing DHL Air Express and Ground business will likely move to UPS and FedEx," he wrote May 16.</p><p></p><p>As it prepares to trim its domestic U.S. network, DHL has recently begun to selectively ask some of its largest customers, who previously negotiated deep discounts, for 10 percent to 15 percent annual rate increases or drop non-profitable accounts that decline to do so, Wolfe said in his research note."</p></blockquote><p></p>
[QUOTE="worldwide, post: 344370, member: 2193"] "Stock analyst Ed Wolfe predicted on May 16 in a research note that DHL could close as many as 90 to 100 of its U.S. terminals, return to its previous life focusing on international service and outsource local deliveries to trucking firms and the U.S. Postal Service. Wolfe reported that as early as July DHL could begin closing sort and distribution terminals, which tend to combine ground and air products. DHL's big air hub in Wilmington, Ohio, is likely to survive the cutback. The analyst also forecast that DHL is likely to partner with USPS for last-mile delivery for small ground shipments, and may rely on YRC Worldwide (parent of Yellow Transportation and Roadway among others), FedEx Freight or other motor carriers for line haul delivery between its remaining terminals and USPS local drop-off centers, known as Destination Delivery Units, or bulk regional centers. The logical place for DHL to outsource is USPS, he said, because it has the lowest cost and they already have a relationship through the DHL @Home Service to do residential last-mile delivery. Under such a scenario, DHL could concentrate delivery operations in large cities, leaving to its partner smaller cities and rural areas where there is limited business but lots of territory to cover. Wolfe warned that DHL could soon run into service problems with its most demanding customers. "We believe these restructurings will likely lead to untenable service levels for many current DHL Express and Ground customers, and a material amount of existing DHL Air Express and Ground business will likely move to UPS and FedEx," he wrote May 16. As it prepares to trim its domestic U.S. network, DHL has recently begun to selectively ask some of its largest customers, who previously negotiated deep discounts, for 10 percent to 15 percent annual rate increases or drop non-profitable accounts that decline to do so, Wolfe said in his research note." [/QUOTE]
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