Discussion in 'UPS Discussions' started by feederfrankie, May 28, 2008.
UPS and DHL Work Toward Air Lift Agreement
ALERT (SYMBOL: UPS)
UPS in pact with DHL
By MarketWatch MarketWatch
5/28/2008 08:46:21 AM
NEW YORK (MarketWatch) -- United Parcel Service Inc. said Wednesday that it is working on an agreement to provide transportation in its air network for all of DHL Express U.S.'s deferred and international package volume in the U.S. DHL is a subsidiary of Deutsche Post AG. United Parcel, an Atlanta-based package delivery company, said it expects to agree to a final contract later this year, which it anticipates will be for a term of 10 years and produce up to $1 billion in additional annual revenue for UPS. UPS said it would begin phasing in a limited amount of volume this year, with ramp up next year. The company will add additional capacity and is scheduled to take delivery of 12 new aircrafts in the next two years. UPS won't be involved with picking up or delivering DHL packages, but rather will transport packages, primarily between airports. UPS currently performs this service for the U.S. Postal Service.
Thankfully the rumors of them making this kind of deal with FedEx were untrue. This has helped our stock bounce today, which we badly needed. If oil will give up it's bubble price, our stock could strengthen.
From your mouth to God's ear.......
More announcements from DHL are coming...
I'm just a dumb truck driver but.....
does it make sense to help the competition so they can continue to compete against us?
I'm sure there is some money for our company in this deal but at what eventual cost to us?
Can someone help this dumb truck driver understand?
Well yes it looks like you guys will be flying our frieght.big surpise to us as we all thought it would be fedex.well glad that it will be a teamsters flying our frieght.
jozer local 986 dhl vny
I agree, it is always beat into our heads to squash the competition, and this just seems like we are helping them to bandage their wounds. Wouldn't it be a better scenario if they went out of business then we could also get the pickup and delivery volume and fly our own stuff around?
It's us or FedEx, would you rather FedEx make an extra 1 billion a year or us make the 1 billion a year? Someone will end up running their air freight, better us for the extra revenue boost.
From the outside it doesn't make much sense to help the competition, but the way I see it now we will be in a position to take DHL over in the future. If DHL continues to lose money year after year, then UPS will be in a better postion to buy out DHL and convert their customers to UPS. Better us than Fedex.
No announcements have stated that UPS will make deliveries. In fact strong roumor is the opposite.
UPS will provide airport to airport transportation. Looks like air lift only.
Any profit in these economy times for our company is good. Helping the competition or not.
Our PCM this am..........Air lift only.
true, they are looking at dhl's international business.
Hmm. something very fishy... exactly how are they going to keep DHL pkgs seperate from UPS pkgs? Is UPS going to siphon off delivery volume to DHL? The more you think about this the more it doesnt make sense
FDX probably wanted the whole enchilada and not give them the same airlift it gives the USPS. On the FDX website it shows that they move the USPS freight after the night sort is over. What probably happened is when DHL told FDX they wanted lift during their night sort just for airlift FDX probably said "KISS-MY-A**!" Unless you agree for FDX to deliver all your freight exclusively you can consider this deal over.
Remember they were in talks with FDX until talks fell apart. This is just my opinion on what I think happened.
This is my guess.
The dhl packages are containerized seperately at the origin airports, flown to Louisville, unloaded, and either sorted on seperate belts, recontainerized and flown to their final destination hubs, or, once they arrive in Louisville, the containers are straight-shot flown to dhl's main overnight sort hub and dhl sorts and finishes the transport to their own destination hubs.
Either way, it appears the you guys and gals in Louisville may have the opportunity to really rack up the sales leads points.
The way I see this volume going thru our system is that the DHL buildings will make bypass containers and load the volume into a UPS air trailer. These cans will already be sorted by the DHL people. I am sure that
all of the UPS major air hubs will be getting cans for DHL destination gateways to be retrieved. It's possible we might sort some packages but I tend to doubt that. I'm sure that their flows are entirely different from ours.
We currently move USPS cans everyday for the post office. They send us large pre-sorted totes that we load into our cans. They are handled by UPS people but the USPS pre-sorts this volume. I don't see this same thing with NDA volume since our process windows are sooo tight now, it would be a real challenge to keep our network on time.
That's how I see this playing out!!!
Remember the large fish always eats the little ones
It is not the Teamsters that "fly" the freight. The airline mechanics and pilots and ground mechanics are in a different union. The Teamsters do most of the other jobs.
It's good for UPS because excess lift capacity will probably largely be eliminated. Full planes fly at a profit, especially critical as jet fuel prices skyrocket. Most of us here can't understand why FedEx wouldn't try to make the same deal with DHL and max-out our aircraft instead of letting UPS do it. There's nothing worse money-wise than void positions on a freighter. Airport to airport, and DHL takes over from there....seems like a no-brainer. Fred Smith is a lot like his famous Yale classmate who occupies the Oval Office....stubborn and "infallible" I wonder if Fred can also "talk" with God like Bush says he does. Perhaps the Almighty told Smith to let UPS haul the freight. I don't get it...
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