Air Transport World

Slow Delivery DHL's ambitious plans for US market have yet to come to fruition.

In early 2004, Klaus Zumwinkel, chairman and CEO of DHL Express parent Deutsche Post World Net, made something of a victory lap in the US. The contentious legal dispute over whether DHL subservice airlines Astar Air Cargo (formerly DHL Airways) and ABX Air (formerly the air arm of Airborne Express) could carry DHL cargo in the US had just been decided favorably. DHL indeed could expand its widely successful global operation into the world's largest express delivery market and attempt to become the "third alternative" to UPS and FedEx, which collectively control more than 90% of the market and had joined forces to try to block its entry.


The German executive met with members of Congress and visited editorial boards of major US newspapers, promising that DHL would provide top-flight service and create thousands of jobs. At a posh dinner at one of Washington's oldest hotels, he held court at the center of an elegant dining room, telling luminaries, "I'm a fan of this country." He reminisced about his years at the University of Pennsylvania's Wharton School and extolled the virtues of competition. "UPS is number three in Germany and in the UK, and we are number three here," he said. "We are used to competition in other parts of the world and I think [UPS and FedEx] are starting to get used to competition in the US."

Nearly four years later, however, the results of DHL's US venture are decidedly mixed. Profitability remains elusive, and Zumwinkel admitted during DPWN's third-quarter earnings conference call that the plan to "break even" in the US by 2009 is not on track. …

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