Regarding the article, “What You Need to Know About DHL Deal,” in the June 18 edition of O+F Advisor:
The principle purpose of the new network model is to reduce costs and maintain a competitive choice for U.S. and global customers. It will remove excess capacity, better integrate our air and ground network, and better align our network to where the majority of businesses do business. DHL will continue to pick up more than 99% of current volume and deliver to 100% of current coverage.
Our proposed agreement with UPS for air uplift represents both a prudent financial move for DHL and UPS given current market conditions and an innovative arrangement for the U.S. industry. UPS provides a comprehensive solution to serve our domestic airlift needs in a cost effective and reliable way.
The UPS arrangement will in no way diminish our focus on the customer and their pickup and delivery requirements. While we have just begun to discuss the operational specifics with UPS, we will continue to be a flexible, responsive organization and will continue to invest in the areas that enable us to provide even higher levels of service with a customer-focused orientation. In fact, customers can expect still greater reliability through a less complex, more focused and cost-efficient network.
In addition, with the discontinuation of the @home residential product this year, DHL removes a product that brings with it significant operating costs and is not aligned with our core strengths nor with our more focused network. By eliminating the product from our network, with its seasonal spikes of volume and operational complexity, we will further improve reliability throughout the year and enhance service levels particularly during peak season. It will also allow us the opportunity to further improve performance in our core domestic and international products.