PLANTATION, Fla. — DHL Express is cutting ties with its domestic U.S. service in an effort to reduce operating costs by more than 80 percent.
Domestic service in the U.S. will be discontinued as of Jan. 30, 2009. The restructuring will drastically affect how the courier company does business in the U.S., but service and operations will remain the same in all other regions and countries.
As a result of the Germany-headquartered companies restructuring, 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 to less than $1 billion.
"Since its announcement on May 28, DHL has been diligently implementing its stated restructuring plan and is ahead of meeting all key components of the plan,” said John Mullen, Global CEO of DHL Express. “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."
DHL’s U.S. Express business will focus entirely on its international offerings. The company predicts 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 already deliver to and outbound international shipments will continue to be picked up with virtually no change to current service levels.
"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. “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.”
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