SCM Lowdown

DHL Express plans to restructuring its operations in United States

In a very crucial move in international logistics and supply chain management, the Deutsche Post World Net, the parent body of the DHL express announced in a press conference on 28th May at its headquarter in Bonn, Germany that the significant reduction in DHL Express’ US operations is in its plans. This announcement at the press conference put an end around all the speculation as about the future of DHL in United States. However, DPWN denied that it is not in mood, completely, closing down operations in US market.

In a series of initiative announced at DWPN press conference for improving infrastructure of DHL one is to jointly work with UPS ( United States Parcel Service) on $10 billion contract to airlift capacity and reduce costs in its ground infrastructure operations, though contract is still undergoing through progress.

DPWN informed that under this contract UPS will provide airlift for DHL Express U.S. domestic and international shipments from airport-to-airport within North America. Presently, DHL is using ABX Air and Astar Air Cargo for these services. This change will help DPWN in a way that it would have from now onward s single airline partner in the United States.

As about the far reaching impact of this restructuring DPWN told that this will reduce aviation costs through outsourcing to UPS thus help to streamline infrastructure by reducing and closing down U.S stations in low density and remote areas and reducing pick up and linehaul delivery routes and ground linehaul sectors by 17 and 18 percent, respectively.

The other benefit of this partnership as expected by DPWN is its deliverance of services to more rural part of the United States with the Help of United States Postal Service.  As for its operations and expansion the DHL has invested more than $ 3 billion into the America since 2003 including $ 1.2 billion in infrastructure and distribution, however, according to a Dow Jones report the total loss for previous four years for DHL was $ 3 billion.

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