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DHL’s American Absence Not a Problem

Published November 18, 2008

PLANTATION, FL (BRAIN)—DHL will stop making express deliveries within the U.S. starting January 30, closing its 18 main distribution hubs while cutting most of its 13,000 U.S. jobs.

Most U.S. bicycle companies didn’t seem too concerned that DHL was going away, considering that the vast majority rely on United Parcel Service and FedEx for their shipping needs.

“We use DHL very little,” said Chuck Hooper, president of Seattle Bike Supply. “Our main small package companies are FedEx and UPS. DHL is most effective in Europe. I believe FedEx and UPS are the market’s dominant players so I don’t believe DHL going away will be too devastating for anyone.”

Since purchasing Airborne Express five years ago to better compete with UPS and FedEx, DHL has lost nearly $10 billion in the U.S. Germany’s Deutsche Post, DHL’s parent company, will take an estimated $1 billion loss for the year as a result of this U.S. withdrawal.

South Carolina distributor The Hawley Company has been slowly moving away from DHL for the last year, with UPS and FedEx providing better service, according to its marketing manager Dave Goeppner.

“With DHL now going away completely, we will utilize UPS and FedEx even more along with UPS LTL [its freight service],” Goeppner said. “With the LTL service by UPS, we can match the favorable transit times previously provided by DHL.”

United Parcel Service and FedEx both recently raised its shipping rates for 2009. UPS raises its rates for ground to 5.9 percent and air to 4.9 percent. The rate increase for air express and international shipments is based on a 6.9 percent increase in base rate, minus a 2 percent reduction in the air and international fuel surcharge index.

FedEx said it would raise its rates by an average of 6.9 percent, with a 2 percent cut to its surcharges.

—Jason Norman

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