November 17, 2008: The world's largest national economy is not large enough, it appears, for three private parcel carriers.
DHL's announcement last week that it will entirely scrap its domestic air and ground delivery business in the United States ends a five-year, $10 billion effort to mount a new competitive challenge to FedEx and UPS, sending shippers looking for alternatives at the busiest period of the year and toward a new competitive landscape. Although the end of DHL's domestic operation isn't scheduled until Jan. 30, there already is a fight for many thousands of daily parcel shipments and, say experts, a growing chance of a bigger battle for air express business outside of the United States.Click here to read more at Traffic World Online.
November 14, 2008: The worsening recession has claimed more victims, as the European transport giant DHL announced Nov. 10 that they are ending all domestic U.S. ground and air shipping. After January DHL will only pick up and deliver international shipments.
An estimated 80 percent of DHL Teamsters will lose their jobs. Many terminals already have 50 percent laid off. Hopefully UPS will pick up most of the DHL freight, rather than nonunion FedEx. But UPS has no obligation to hire the displaced DHL Teamsters.
The International Union is expected to meet with management in mid-November over the massive shutdown. The International Union gave DHL low-wage part-timers in the 2008 contract to help the company become profitable.
The pull-out from the U.S. domestic market is devastating to the Wilmington, Ohio, area, where DHL employs 7,000 people at its U.S. hub. That hub was built in 2005 with the help of $400 million in state and local incentives.
November 10, 2008: DHL, the world's number one international logistics and express service provider, today announced a repositioning of its U.S. Express business. Beginning January 30, 2009, DHL's U.S. Express business will focus entirely on its international offerings and will discontinue its domestic-only air and ground services. However, the company will retain a strong international presence and capability in the U.S. going forward.
The announcement was made this morning at a press conference held in Bonn, Germany by Deutsche Post World Net, parent company of DHL U.S. Express.
Click here to read more at Market Watch.
August 1, 2008: Less than two months after members ratified a concessionary contract that IBT officials touted as saving jobs, DHL has implemented layoffs, which could be permanent cuts.
Those with sufficient seniority are being offered the option to bid on part time positions, which the new contract allows.
It seems clear DHL got what they wanted from those negotiations.
June 11, 2008: The restructuring of DHL's air network will reach down to the ground as well when ABF Freight System begins delivering a portion of the domestic freight affected by DHL's service cutbacks.
While UPS will be the recipient of DHL's outsourced air freight in a 10-year contract worth up to $1 billion per year, the U.S. Postal Service is slated to take over the remote linehaul routes on the ground that DHL is eliminating and that DHL estimates will affect 3.3 percent of deliveries and less than 1 percent of its pickups.
Click here to read more at trafficworld.com
June 3, 2008: Last week DHL announced major cuts, including eliminating many outlying stations, outsourcing more delivery to the post office, and contracting out its air operations to UPS.
Click here to see DHL management’s presentation of their restructuring plan.
May 28, 2008: DHL unveiled a far-reaching restructuring of its troubled U.S. express business Wednesday that includes a sharp pullback in its operations and outsourcing its air transport business to competitor UPS.
John Allan, chief financial officer of DHL parent Deutsche Post World Net, called the moves "radical and decisive actions" but said it will still leave DHL losing $3 billion between 2008 and 2011.
DHL said it will eliminate about 34 percent of its stations in the United States by consolidating some stations in various cities and shutting others in remote locations, leaving the carrier with a smaller operation in the country while maintaining a "strong presence." The cutbacks, the company said, would have a "very minimal" impact on customers, affecting only a small percentage of pickups and deliveries as DHL uses the U.S. Postal Service for some of its remote pickup and delivery operations.
"The impacted number of shipments is below 4 percent," said DPWN Chairman Frank Appel.
The larger change will be in air operations, where DHL said it will phase out its outsourced flying with ABX Air and ASTAR Air Cargo and turn that business over to UPS. DHL said it is negotiating a 10-year contract for the airport-to-airport transportation with UPS but expected to pay its competitor some $1 billion a year for the aviation services.
The actions scale back the strong push DHL made in the United States in recent years, capped by the purchase in 2003 of Airborne Express, then the country's No. 3 express carrier. Publicly traded DPWN has been under growing pressure to pull back or even withdraw from the United States in the face of hundreds of millions of dollars in losses.
Deutsche Post would not detail its total losses in the United States, but the company projects $1.3 billion in operating losses in 2008, $900 million next and continuing losses at least through 2011.Taken from Traffic World.
May 28, 2008: Deutsche Post AG, Europe's biggest mail carrier, will shrink its U.S. network, fire workers and transfer some deliveries to United Parcel Service Inc. as it seeks to limit losses at its unprofitable DHL division.
The turnaround plan will cost Deutsche Post as much as $2 billion and generate cost savings of about $1 billion a year, the Bonn-based company said today in a statement. DHL will cut as many as 1,800 jobs in the U.S.
Click here to read more at bloomberg.com.
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March 27, 2008: DHL Teamsters are voting on their future.
The deal has sparked opposition from a broad network of stewards and members.
In mid-April some 8,000 DHL Teamsters will get ballots to vote on a proposed national contract that would allow the company to hire an unlimited number of low-wage part-timers.
The deal has generated opposition, not from a few dissidents, but from a broad network of stewards and long-time Teamsters who have held meetings and conference calls, issued emails and leaflets, and sparked a nationwide debate on the contract.
The International Union is using all its resources to sell its proposed deal. The point man behind the bargaining and sales job is President Hoffa’s special assistant Brad Slawson.
Slawson has played on members’ insecurities about the company’s future. DHL, which is part of the largest transport corporation in the world, is losing money in the U.S. due to poor operational management.
Lack of Protections
The International Union has hyped the small protections provided to drivers in the short-term while downplaying the long-term threats to good, full-time jobs and union power.
The agreement allows DHL to gradually convert all sort, airport and dock work to part-time. Even if current full-timers are laid off, part-timers can be hired at less than half wages.
If all full-timers are working, the deal allows for part-timers to be used as afternoon drivers, up to 15 percent of the full-time complement.
Union protection is lacking. There is no percentage limit on part-timers in terminal operations.
If the contract is approved, the first impact will be to take overtime opportunities away from drivers. The long-term effect is worse: the company will move toward majority part-timer operation, with union strength greatly weakened.
In exchange, the deal includes a “red circle by name” provision so that current full-time drivers cannot have their jobs eliminated. Benefit contributions will match UPS, but full-time wages will fall to $7 an hour behind the UPS rate by the end of the contract.
The Teamsters Union will get more dues from part-timers, and a card-check agreement to allow some 1,200 gateway workers to become Teamsters under a cut-rate contract that Slawson will negotiate.
This is a one-sided deal.
Click here to read more at Teamster Viewpoint.