DHL Dumps @Home Service

As part of its U.S. restructuring, Multichannel Merchant has learned that DHL Express is halting its @home delivery, effective Sept. 1. The @home service was designed for business-to-consumer shippers, and by some accounts was DHL’s fastest-growing product during the past five years.

But DHL considers @home to be a “noncore” product. The service, which generates less than 10% of its revenue, is not profitable because of its operational challenges and seasonal peaks. The move will enable DHL to focus on its core domestic and international express products in the U.S. Final pickups for @home will take place on Aug. 29.

Parent company Deutsche Post has been under pressure to do something about DHL’s dismal performance in the U.S.--it expects to lose more than $1 billion in the U.S. this year. The company announced in late May that DHL Americas will end a partnership with its two airline subcontractors and close about a third of its U.S. stations.

To cut costs, DHL is consolidating and closing smaller sorting facilities into larger stations; reducing pickup and delivery routes by 17%; and scaling back its ground linehaul network by 18%. DHL is working out a deal with United Parcel Service in which UPS will provide air freight for DHL Express U.S. domestic and international shipments within North America.

But German newspaper Die Welt is reporting that the U.S. Justice Department may investigate whether DHL’s impending deal with UPS conflicts with antitrust laws. Representatives from Ohio are said to be pushing for a probe, as the agreement will mean a loss of some 8,000 jobs in the state if DHL’s Wilmington, OH, hub is shuttered as a result.