DHL announced today, Nov. 10, that its U.S. Express business will focus entirely on its international offerings and will discontinue its domestic-only air and ground services beginning Jan. 30. However, the company said it will retain a strong international presence and capability in the United States going forward.
The announcement was made at a press conference in Bonn, Germany, by Deutsche Post World Net, parent company of DHL U.S. Express. “This is the right move for our U.S. Express operations given the current economic climate and for the long run,” said John Mullen, global chief executive officer of DHL Express. “Focusing our U.S. Express efforts on what we do better than anyone else – international shipping – serves the best interests of our customers, employees and shareholders around the world.”
DHL U.S. Express said it will close its U.S. ground hubs and reduce the number of stations from 412 to 103, resulting in an additional reduction of 9,500 U.S. jobs at DHL Express on top of the 5,400 positions already reduced since January. The company will retain 3,000 to 4,000 U.S. Express employees, tailored to the needs of international express customers.
The company said these measures will allow its U.S. Express business to reduce its operating costs from $5.4 billion to less than $1 billion, a decrease of more than 80 percent. “Making a decision that affects the lives of many dedicated employees is never easy, but this is the best path forward for our company,” Mullen said.
The company said it will maintain its international express service in the United States at today’s levels, and that the United States will remain an integral part of DHL’s global network. All international shipments to and from the United States still will be delivered, while 99 percent will be picked up, according to the company.
“DHL remains committed to the U.S. express market,” Mullen said. “A continued U.S. presence is essential to our entire global Express network. Close to half of our top 200 customers are based in the U.S., and U.S. trade lanes make up close to half of our global volume, and half of our global shipments touch the U.S. We are here to stay.”
The company said there would be no impact to services offered by the other DHL/DPWN businesses in the United States, such as global forwarding/freight, supply chain/customer information services and DHL Global Mail. With more than 25,000 employees across the country, those divisions will continue to conduct U.S. operations, according to the company.
In late May, DHL had announced plans to restructure its U.S. Express business by working with UPS for airlift capacity. Under the plan, UPS was to provide air uplift for DHL Express U.S. domestic and international shipments within North America. It wasn’t immediately clear how today’s announcement would affect that arrangement.
DHL Express USA is No. 4 in the current CCJ Top 250 of the nation’s for-hire carriers, ranked by revenue, fleet size and employment base.