FlightPhoenix

ISTANBUL (Reuters) - Deutsche Post could sound out possible cooperation with other companies in the United States if talks with United Parcel Service fail, Deutsche Post Chief Executive Frank Appel said late on Thursday.
Earlier this year, Europe's largest mail and express delivery company and UPS agreed to cooperate on air freight in the United States, but now talks have stalled.
Deutsche Post on Monday said it planned to shut down its domestic U.S. express delivery business and cut a total 14,900 jobs there. That move would cut its air capacity there to less than 100,000 shipments per day, from 1.2 million previously.
UPS Chief Executive Scott Davis last month said the planned size and scope of the agreement may change, arguing that customers may not be happy about Deutsche Post's plans to scale down its business in the United States.
"We would like to come to an agreement," Appel said in remarks released on Friday.
He did not say whether Deutsche Post already had alternative partners in mind, but he said it should become clear in coming weeks whether a deal would be struck with UPS.
Following the cut in business there, the volume of the cooperation would involve only about 100 million shipments per year, he said.
Sluggish consumer spending and shrinking investments by businesses are hurting shippers around the world, with the United States being hit the hardest. Deutsche Post has lost more than $1 billion a year there for the past two years.
Deutsche Post shares rose 1.7 percent to 9.925 euros by 0810 GMT, lagging a 3 percent gain by the German blue-chip index.
The company trades at about 6.7 times estimated 2009 earnings, a discount to both UPS and rival FedEx as investors worry it is losing ground against its biggest rivals in the United States. Its stock has lost more than half its value in the past six months.
Deutsche Post will likely post a 2008 net loss as costs to restructure in the United States and write-downs on some assets drag down its bottom line. If it books the bulk of write-downs this year, it would at least break even in 2009, Appel said.
Despite the expected loss this year, Deutsche Post still planned to pay a dividend at last year's level of 0.90 euros ($1.12) per share, which could be paid out of cash flow.
In addition, Appel said the company would decide next year whether to pay out to shareholders part of the proceeds from the sale of Deutsche Postbank as a special dividend.
Deutsche Post agreed in September to sell its Postbank stake to Deutsche Bank. Under the agreement, it will sell an initial 29.75 percent stake for 2.79 billion euros in cash.

Commando

I don't see UPS making an investment to move 100K packages. The logistics and scanning hardware alone. I see the deal falling apart since it is so small now. USPS or ABX-Astar will do it. One will get screwed. Astar or ABX. They don't need both.

FR8K9

I don't see them keeping the ILN sort open for that small amount of volume. They need to hire someone with sort facilities, unless...

They sell ILN back to Wilmington and make Ohio responsible for the overhead.

Political stupidity killed this deal. DHL will continue to bleed in the USA for the forseeable future.

Rottweiler

This article was written in Istanbul !!!???

I think the "stall" this reporter is talking about is the delay from the original August 31 contract signing date to the "end of the year" now being talked about.



Rott

Brown

I think the deal will still happen, but either way, UPS and FedEx have been making out very well.

We currently have DHL test-packages in our system, also I don't know who is going to sort the DHL packages if the UPS deal falls apart. I cannot imagine that DHL wants to start the whole negotiating process over with FedEx or someone else.

BM made it pretty clear at the meeting two weeks ago that the DHL deal is on track.

How much will it benefit this pilot group now though remains to be seen. It is obviously a smaller deal, so I'm not sure that we will have to hire immediately because of it.

It's the ex-DHL customers that are coming over to UPS now that might require us to hire. I've heard that we're getting a lot of new business now. They are certainly pushing for it.

hvydriver

The same article is also on Forbes, Rott.

UPDATE 1-Deutsche Post eyes options as UPS talks drag on - Forbes.com

bluejuice

Just a quick question, but why would UPS invest anything in DHL right now with DHL announcing that they intend to cease U.S. operations on Jan 30, 09?

With all of the DHL U.S. customers soon hitting the market, UPS could gain alot more of the pie without having to dole out the dough.

Rottweiler

The aritcle appears in Forbes, which is a very credible news source. But it is the same article, written by the same journalist, still from Istanbul. Istanbul may be the third largest city on the planet, but not known as a source for business news between US and German enterprises.

Until I read something from UPS or DHL, I still think the "stall" the reporter is talking about is the delay from August 31 to December 31.

Rott

Rottweiler

Hey Rottweiler!

You Moron! The IPNN tonight specifically quoted UPS and DHL as saying the talks have stalled. There, are you happy? You finally heard it directly from UPS and DHL. The talks are officially stalled. Are you happy?

Crap. There I go talking to myself again. Sorry. The doctor said my meds were supposed to solve this little problem.

Good night Nurse Ratched.

Rott

hvydriver

ROFLOL!! That's funny, Rott! It's nice to know that I'm not the only one that does that.