Friday, May 30, 2014

After Tough Years, DHL Says U.S. Business is Growing Again

The Wall Street Journal
By Laura Stevens

May 30, 2014,  1:19 pm ET

After a rocky few years, DHL Express has gotten its American mojo back, its new U.S. CEO Mike Parra said in an interview with The Wall Street Journal.

DHL Express – which now delivers only cross-border packages into and out of the U.S. – has being growing at double-digit rates in the U.S. market as customers take advantage of the German company’s international expertise, Mr. Parra said. It’s even trying some new tricks, like whisking the most important packages from Los Angeles airport to downtown via helicopter, shaving off waiting time for impatient financial clients.

The helicopters are the latest move in what has been a difficult ride for the global logistics giant in the U.S. While the company has been doing business in the U.S. since 1969, it invested heavily last decade in building a domestic delivery network to compete with United Parcel Service Inc. and FedEx Corp. on their home turf. But in 2008, the company decided to cut its losses. Its U.S.-linked shipping volume fell to about 100,000 deliveries a day from 1.2 million. At the time, it said it planned to retain between about 3,000 and 4,000 full-time DHL employees in the U.S., down from 13,000.

But that move allowed the company to refocus, Mr. Parra said. He took the helm of the company’s U.S. operations in February.

“Now that we’re focused on our core competencies, what I have seen is that customers are coming back and saying, ‘We want to use DHL for international,’” Mr. Parra said.

Last year the company said it spent $105 million on expanding its Cincinnati hub. It’s the company’s biggest U.S. hub with 42 arrivals and departures of cargo jets every day, Mr. Parra said. The company has doubled the size of its U.S. vehicle fleet over the last three years, and it plans to double the number of sales men and women it employs here over the next 24 months.

The company is also introducing some unique features for customers. For example, DHL started a helicopter delivery service in Los Angeles for some of its large financial customers, shaving 1.5 hours off the delivery time at no extra cost. The company plans to add helicopter service in Chicago as well.

Internationally, DHL Express is spending between €600 million ($816 million) and €700 million each year on upgrading its network, he added.

While the company’s U.S. operations are still small relative to UPS and FedEx, on a global level it is a giant. Deutsche Post AG, the German parent company of DHL Express, which includes the German postal service, recorded €55.08 billion ($74.95 billion) in revenue in 2013, and it employs about 480,000 people in more than 220 countries.

By comparison, UPS employs about 395,000 in over 220 countries, with total revenue in 2013 of $55.4 billion.


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