DHL Will Cut 9,500 Jobs, Stop Domestic US Service



DHL Will Cut 9,500 Jobs, Stop Domestic US Service  

November 30, 2008, DHL Express service centers, cut 9,500 jobs in the US, and eliminate US-only domestic shipping by land and air, the company said today, citing heavy losses and fierce competition with UPS and FedEx. The company said the new round of cuts are on top of another 5,400 layoffs it already announced.

DHL, the world's number one international logistics and express service provider, today announced a repositioning of its loss-making U.S. Express business. DHL's U.S. Express business will focus entirely on its international offering and will discontinue domestic-only air and ground products on January 30, 2009, but leaving behind a strong international presence and capability in the U.S.. DHL Express' service portfolio will be maintained everywhere else in the world and there will be no service impact to our operations in all other regions and countries globally.


"Since its announcement on May 28th, DHL has been diligently implementing its stated restructuring plan and is ahead of meeting all key components of the plan. However, given the current background of unprecedented uncertainty and risk in the global economy we feel that it is critical and prudent to take additional measures to combat what we believe will be an extremely challenging 2009, and to do this ahead of time." said John Mullen, Global CEO of DHL Express.

"This is the right move for our U.S. Express operations given the current economic climate and for the long run. When we looked for efficiencies in the U.S. Express market, we decided to focus on what we do best as a company, and that's international shipping," said Mullen. DHL remains committed to providing industry-leading international services and the U.S. remains an integral part of its global network. A continued U.S. presence is essential to its entire global Express network; close to half of its top 200 customers are based in the U.S., U.S. trade lanes make up close to half of its global volume, and half of its global shipments touch the U.S.. "We are here to stay," Mullen added.

DHL's U.S. international express service will be extremely competitive - in fact, 71 percent of all international shipments to and from major metropolitan areas will benefit from improved transit times compared to today and a further 25 percent will see no change. International shipments into the U.S. will continue to be delivered to 100 percent of ZIP codes we already deliver to and outbound international shipments will continue to be picked up with virtually no change to current service levels.

As the longest-serving and global leader in international express delivery, DHL is continuously strengthening its global air network, through its dedicated partners and joint ventures as well as its own fleet of aircraft, enabling it to grow its volumes and enhance its time critical services capabilities on all its intercontinental trade lanes. Our current partnerships: AeroLogic joint venture with Lufthansa Cargo serving Europe and Asia; Polar Air Cargo for transpacific services, and the build up of a DHL-owned transatlantic fleet, consisting of six modern Boeing B767-300F freighters demonstrate DHL's determination to maintain its position as a leading international express service provider. With one of the most advanced transportation systems in the world, the U.S. market will not only be well connected but will continue to play a critical role for the DHL network.

As a result of the strategic shift, DHL Express will close all of its U.S. ground hubs, reduce the number of stations from 412 to 103 and retain 3,000 to 4,000 U.S.-based employees who are tailored to the needs of DHL's international express customers. These measures will allow DHL Express' U.S. business to reduce its operating costs from the current $5.4 billion (4.2 billion Euros) to less than $1 billion (770 million Euros), a reduction of over 80 percent.

The measures announced today will have no impact to services offered by other DHL businesses in the U.S. such as Global Forwarding/Freight, Supply Chain/Customer Information Services (CIS) and DHL Global Mail are not affected by the current restructuring measures. With their almost 27,000 employees across the nation, these divisions will continue to develop their successful U.S. operations.

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