Formed in 1997. A division of (DHL) International. Domestic, regional, & international, cargo jet airplane services.
P O Box 759
Lanseria 1748, South Africa.
SOUTH AFRICA (REPUBLIC OF SOUTH AFRICA) WAS ESTABLISHED IN 1910. THE OFFICIAL LANGUAGES ARE: AFRIKAANS, & ENGLISH. IT COVERS AN AREA OF 1.12 MILLION SQ KM. THE POPULATION IS 44 MILLION. THE CAPITAL CITY IS PRETORIA.
February 2005: 2 727-277F's (22643, ZS-DPE; 22644, ZS-DPF), deliveries.
April 2007: (DHL) - European Air Transport (EPT) is ramping up operations at Leipzig/Halle (LEJ), to which it started flying in 2005, and intends to turn it into a European hub with an investment of €300 million. It currently operates 14 daily frequencies at (LEJ), most recently to Hamburg and Ljubljana, and handles approximately 160 tons of freight per day. Next year, it plans to land 50 airplanes at the airport each night. It said the expansion will create around +3,500 jobs by 2012.
June 2007: 727-277F (22643, ZS-DPE), delivery.
May 2008: (DHL) - European Air Transport (EPT) opened its new €300 million/$473 million European airfreight hub at Leipzig/Halle, officially relocating its air operations base from Brussels. The new hub "is situated at a crossroads to provide direct North - South and East - West access to Europe and connects both established and emerging markets in Central and Eastern Europe and Asia," (EPT) said, adding that it has "comprehensive authorization for night-time flights" at the airport. It will employ 2,000 initially and expects that to rise to 3,500 by 2012.
(DHL) unveiled a $2 billion restructuring of its loss-making USA express business that includes shifting its air lift capacity in the market to rival (UPS), a potentially devastating blow to (ABX) Air and Astar Air Cargo (DHL), which currently provide the German express giant's USA lift. Parent, Deutsche Post World Net (DPWN) said it no longer can tolerate massive annual losses in (DHL)'s USA business, which it estimates will post negative (EBIT) of -$1.3 billion in 2008. While (DHL)'s signature yellow ground delivery vehicles still will operate in the USA, its airport-to-airport flying will be handled by (UPS) Airlines, beginning later this year, (DPWN) said. Additionally, it will close 34% of its package sorting facilities, particularly those in smaller markets, relinquishing blanket USA coverage in favor of higher-yield major markets. The USA restructuring is expected to generate cost savings of -$800 million in 2010 and around -$1 billion annually going forward from 2011, (DPWN) said. A finalized (DHL) - (UPS) contract will be signed later this year, the companies said.
The fate of (ABX) and Astar (DHL) is unclear, but (DHL) air hub activities presumably will be shifted from Wilmington, Ohio to Louisville, where (UPS)'s WorldPort sorting facility is undergoing a $1 billion expansion to be completed in 2010.
(ABX) President & (CEO) Joe Hete said (DHL) has informed it that (UPS) likely will take over "substantially all of the services that (ABX) Air currently provides to (DHL)," adding: "We are disappointed that (DHL) has chosen not to pursue alternative means to improve its competitive position in the USA." (ABX) generates about 75% of its revenue from (DHL) operations. Astar (DHL) did not comment.
The (DHL) - (UPS) announcement marks a stark contrast from 2004, when (DHL) entered the USA market, following a lengthy regulatory battle in which (DPWN) and (UPS) exchanged heated public barbs. (DHL) has been unable to gain more than a 6% share of the USA express delivery market. (DPWN) (CEO) Frank Appel said it was time to take "a more pragmatic approach to be a smarter player in the challenging USA express market."
(UPS) said the contract with (DHL) is expected to last 10 years and will produce up to $1 billion in annual revenue. The deal, however, is not a cease-and-desist between the longtime global rivals, (COO), David Abney said, explaining that it "would be a relatively straightforward air lift agreement and that (UPS) and (DHL) will continue to compete."
August 2008: (DHL) Express appointed Jose Pereira as VP Technical Strategy & Services, Air Fleet Management.
November 2008: Deutsche Post AG will close all of its (DHL) Express service centers, cut -9,500 jobs in the USA and eliminate USA-only domestic shipping by land and air, the company said, citing heavy losses and fierce competition. The Bonn-based company said that new round of cuts are on top of another -5,400 job cuts it already announced, and blamed heavy losses at the unit, which competes with rivals (UPS) Inc and FedEx (FED) Corp. The cuts are part of a wider plan to curtail operations in the USA, including domestic ground and delivery services, though its international shipping won't be affected. The express unit currently employs some 18,000 workers. Part of the plan calls for the halt to domestic shipping by January 30, the company said after it closes all of its ground hubs.
"The retained USA international express network with a total of 3,000 to 4,000 employees will be tailored to the needs of the group's international express service customers," the company said in a statement. "All international shipments into the USA will still be delivered, while 99 percent of the outbound shipments will be picked up." The move is expected to reduce operating costs at the USA Express unit from $5.4 billion/4.2 billion euros to less than $1 billion/770 million euros. "The international express offering in the USA will be maintained on today's levels and the region will remain an integral part of (DHL)'s global Express network," the company added.
Shares of Deutsche Post were up +4.2% at 9.77 euros/$12.60 in Frankfurt trading.
Later, (DHL) pulled the plug on its 5-year push to become the "3rd alternative" to (UPS) and FedEx (FED) in the USA express shipping market, announcing that all domestic USA services will cease early next year, as it focuses exclusively on international operations to/from 15 - 20 USA metropolitan areas. "The basic reason is that the USA is a highly concentrated duopoly market and the reality is (UPS) and FedEx (FED)'s scale, market reach and brand awareness have made it impossible for us to make it economically viable," (DHL) Express (CEO) John Mullen told reporters in a conference call.
Mullen estimated that (DHL) lost around -$10 billion over the last five years on its USA venture, including its original investment in purchasing Airborne Express (ABX) and its Wilmington, Ohio, air hub. The company estimates it lost about -$1.3 billion annually on USA operations, "a level of loss that cannot be sustained," he said. He explained that Airborne (ABX) was a "small niche player of low quality," and despite (DHL)'s best efforts, it "never became big enough and never had enough reach to be able to compete with the two incumbents." (DHL) is "more than willing" to donate the Wilmington airport to the state of Ohio, he added.
The German delivery giant still is conducting negotiations with (UPS) to turn over the domestic line-haul flight portion of its international shipments to/from the USA to its rival. But the volume carried by (UPS) will be far lower than what originally was envisioned when the two announced their intent last spring to negotiate an agreement under which (UPS) would take over DHL's US air lift from (ABX) Air and Astar Air Cargo (DHL), dropping from about 1.2 million daily shipments to 100,000.
Mullen said he hoped the (DHL) - (UPS) deal will be finalized by year end. Total job losses at (ABX), Astar (DHL) and (DHL) owing to the domestic services shutdown are expected to top -9,500. Those cuts are in addition to -5,400 (DHL) USA jobs already slashed this year.
(DHL) envisions operating international flights into 5 USA gateways, likely including New York, Los Angeles and Louisville, and using line-haul contract flights operated by (UPS) Airlines to reach 15 to 20 markets that cover about 80% to 90% of its international shipping in the USA. It will contract smaller cargo operators to reach the remaining 10% to 20%, Mullen said. (DHL) generates about $4.5 billion annually in USA revenue, about $1 billion of which comes from international services.
February 2010: The European Commission (EC) said it issued charges against "a number of companies concerning their alleged participation in price-fixing cartels in the airfreight forwarding business" and major air cargo players including (UPS) and (DHL) confirmed they were included. Other companies confirming receipt of a formal "statement of objections" from the (EC) included Panalpina, Kuehne & Nagel, and (DSV).
(DHL) claimed it has been granted immunity by the (EC) in exchange for cooperating with the probe. (UPS) said it would "vigorously defend ourselves in this proceeding against any allegations of wrongdoing."
The (EC), the USA Department of Justice and other regulators around the world have been probing price-fixing in the air cargo industry for several years and a host of carriers have pled or been found guilty and paid fines. The (EC)'s latest charges appear to open a new front by implicating the forwarding side of the business.
"The (EC) is investigating allegations that these companies fixed prices by colluding on the imposition, level, timing and application of various surcharges," the (EC) said. "The allegations concern four separate infringements involving the provision of freight forwarding services from the UK to outside the [European Economic Area (EEA)], from the (EEA) to the USA, from China to the (EEA), and from southern China/Hong Kong to the (EEA)."
Companies receiving a statement of objections can reply in writing or request an oral hearing. The (EC) emphasized that the issuing of formal charges does not "prejudge" whether findings of guilt will be rendered.
July 2012: (DHL) opened a $175 million hub at Shanghai Pudong airport (PVG) and said it would invest another $132 million over the next 2 years to enable it to dedicate 8 additional freighter airplanes to (PVG) for flights to north Asia, Europe and the USA.
The new (PVG) express cargo facility spans 88,000 sq m and can process up to 20,000 documents and 20,000 parcels per hour. The German delivery giant already operates Asian hubs in Hong Kong, Bangkok and Singapore.
The planned new flights from (PVG), to be implemented by 2014, will be operated by Aerologic (AGC), DHL Air UK (DHK) and Atlas Air Worldwide Holdings (AAWH) subsidiary, Polar Air Cargo (PAO). “There will be a variety of other providers as well,” (DHL) said.
(DHL) currently operates cargo flights from (PVG) to Hong Kong, destinations in Japan, Leipzig and Cincinnati. Later this year it plans to start new flights from the airport to Seoul Incheon, Taipei, Dalian and Qingdao. “Beijing and Xiamen [are] likely to come on stream in 2013,” it said.