In a move that perhaps tried to find a middle ground, DHL announced last week it was remaining in the US parcel delivery market – but in a scaled-down fashion that would involve potential outsource deals to both UPS and the USPS.
After denying rumors that the company would totally leave its money-losing US operations (see Are Reports of DHL’s Possible US Exit Premature?), the company announced plans for a hybrid presence that would lower costs and outsource some operations to rivals.
That includes plans – not yet finalized – to turn over all of its air freight movements to UPS, shutting down DHL’s massive air freight operations in Wilmington, OH - facilities acquired when DHL purchased Airborne Express. It said it would also close down 30 of its local operations, and outsource additional local deliveries to the United States Post Office.
Since 2003, the USPS has provided last-mile delivery for DHL in more than 20,000 ZIP codes nationwide, primarily in rural areas. The new plans call for using the USPS in an additional 3,600 zip codes, including many more populated areas.
So, with these moves, what’s really left of DHL in North America, and what can current customers really expect?
More Questions Raised than Answers
While the company plans to offer more details, the current announcement leaves shippers with a lot of questions and concerns, says Gerry Hempstead, a parcel industry consultant at Hempstead Consulting.
“There is much for your readers to be concerned about and little time for many shippers to react,” Hempstead told us. “For example, DHL is closing 60 or so facilities on June 30. There is no plan to use UPS in the next 3 months. They hope to get a contract negotiated within 3 months!”
(Transportation Management Article - Continued Below)