DHL walking away from $3.1B in US revenue
11-17-2008, 04:01 AM
#21
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Posts: 276
Originally Posted by Brown
Reading what the various financial analysts are saying, as well as some on some stock trading boards that I follow, the consensus seems to be that UPS (and FedEx, of course) is better off with DHL leaving the market place rather than completing the $1B a year deal.
UPS and FedEx will essentially carve up DHL's volume now, and it will give them incredible pricing power in the US marketplace.
UPS and FedEx will essentially carve up DHL's volume now, and it will give them incredible pricing power in the US marketplace.
FedEx to increase ground, home delivery rates 5.9% in 2009 - MarketWatch
I suspect UPS will follow shortly.
11-17-2008, 04:35 AM
#22
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Clark Howard talked about this issue the other day. Basically saying a duopoly is bad for the consumer (big shock). Dhl is not even dead yet and the price fixing has already begun, of course this is to make up for the fuel surcharge that was removed from everyones bill......... (oh wait they did not take away the fuel surcharge) Looks like the U.S. consumer will lose out again.......... Thanks for the heads up Clark but it appears we are already too late.
11-17-2008, 04:45 AM
#23
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Originally Posted by nightfreight
FR8K9,
Why would ALPA care if Fedex or UPS carries packages that used to be carried by DHL? I am not sure that I understand that.
ALPA supported the carrier (Astar/ABX) because they pay ALPA dues. I am not sure why that would surprise you. It isn't a UPS conspiracy, but if you were and ALPA member, they probably wouldn't have taken such a strong stand. But don't kid yourself, ALPA is almost powerless. By the way, I pay dues to ALPA, but I am no fan of Prater and company.
While you are whining about the loss of the contract, both UPS and Fedex will most likely be much better off in the long run. We lost a big domestic competitor that beat us much of the time on price. So if it makes you feel better to blame Ohio politicians, ALPA, or the Easter Bunny, go for it.
Why would ALPA care if Fedex or UPS carries packages that used to be carried by DHL? I am not sure that I understand that.
ALPA supported the carrier (Astar/ABX) because they pay ALPA dues. I am not sure why that would surprise you. It isn't a UPS conspiracy, but if you were and ALPA member, they probably wouldn't have taken such a strong stand. But don't kid yourself, ALPA is almost powerless. By the way, I pay dues to ALPA, but I am no fan of Prater and company.
While you are whining about the loss of the contract, both UPS and Fedex will most likely be much better off in the long run. We lost a big domestic competitor that beat us much of the time on price. So if it makes you feel better to blame Ohio politicians, ALPA, or the Easter Bunny, go for it.
Personally, I think DHL pullout from the US is a much bigger win for UPS (and FDX) then the original DHL/UPS agreement by itself. The ferocious price undercutting effect DHL had on the two airlines is now gone and the additional market shares they can now split up amongst themselves will help them tremendously in the long run.
Just my 10 yuans...
11-17-2008, 04:54 AM
#24
Retired Doug herder
Joined APC: Mar 2005
Position: Former DC8 73 Capt DHLAirways/Astar. Retired
Posts: 424
Could be that Prater was thinking that way AV80R. My .02 is that that's not the case. It was obvious from the start that there would be little, if any hiring at UPS if the deal was consummated. (Check my posts when all this started. I've said this consistantly all along.)
11-17-2008, 04:59 AM
#25
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Posts: 3,333
Originally Posted by hvydriver
Could be that Prater was thinking that way AV80R. My .02 is that that's not the case. It was obvious from the start that there would be little, if any hiring at UPS if the deal was consummated. (Check my posts when all this started. I've said this consistantly all along.)
11-17-2008, 05:03 AM
#26
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Originally Posted by Sideshow Bob
Won't it be interesting if after all the smoke DHL strikes a deal with either ABX or Astar and the State of Ohio to "save the day" by using ILN as the staging point for their remaining U.S. involved volume, and a shrunken fleet to deliver it...at a greatly reduced cost due to paycuts for the now grateful U.S. workers as well as a huge giveaway funded by the state.
Sneaky f-in Germans. Hose the state and cut payrolls while looking good in the process.
Sneaky f-in Germans. Hose the state and cut payrolls while looking good in the process.
11-17-2008, 05:15 AM
#27
Retired Doug herder
Joined APC: Mar 2005
Position: Former DC8 73 Capt DHLAirways/Astar. Retired
Posts: 424
Originally Posted by ⌐ AV8OR WANNABE
I agree with you, I was just saying that ALPA was "planning" something that was totally out of their control.
11-17-2008, 05:21 AM
#28
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Posts: 1,235
Originally Posted by Whistlin' Dan
It certainly didn't take them long. FedEx just announced a 7% price increase for 2009;
FedEx to increase ground, home delivery rates 5.9% in 2009 - MarketWatch
I suspect UPS will follow shortly.
FedEx to increase ground, home delivery rates 5.9% in 2009 - MarketWatch
I suspect UPS will follow shortly.
11-17-2008, 05:31 AM
#29
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Posts: 3,333
Originally Posted by 757upspilot
I believe UPS has already annouced its price increase for next year. Its fairly routine for them to do so at this time of year. This gives the big shippers a full quarter to adjust .
11-17-2008, 05:43 AM
#30
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Originally Posted by Brown
Very simplistic and dirty math here so go easy on me but...
According to the DPWN's cc last week, DHL is walking away from $3.1B a year in domestic USA revenue by January 31, 2009.
Knowing that the deal between UPS/DHL was supposed to be for $1B a year, it now seems that if UPS and FedEx split the $3.1B right down the middle, UPS will make more (better than $1.5B) than they would have with the UPS/DHL deal in the first place.
It also seems that FedEx should be glad that DHL is packing up and leaving because now FedEX is looking at splitting the $3.1B with UPS.
Now I realize that not all the old DHL accounts will convert to UPS and FedEx (some may go to the Post Office and others may not even renew at all), but even so, the loss of DHL in the marketplace will certainly allow UPS and FedEx to raise prices without DHL undercutting them any more.
Just my dirty math, but as a fairly junior UPSer, these numbers make me a little less concerned now that it seems the big UPS/DHL deal is off/stalled/whatever.
According to the DPWN's cc last week, DHL is walking away from $3.1B a year in domestic USA revenue by January 31, 2009.
Knowing that the deal between UPS/DHL was supposed to be for $1B a year, it now seems that if UPS and FedEx split the $3.1B right down the middle, UPS will make more (better than $1.5B) than they would have with the UPS/DHL deal in the first place.
It also seems that FedEx should be glad that DHL is packing up and leaving because now FedEX is looking at splitting the $3.1B with UPS.
Now I realize that not all the old DHL accounts will convert to UPS and FedEx (some may go to the Post Office and others may not even renew at all), but even so, the loss of DHL in the marketplace will certainly allow UPS and FedEx to raise prices without DHL undercutting them any more.
Just my dirty math, but as a fairly junior UPSer, these numbers make me a little less concerned now that it seems the big UPS/DHL deal is off/stalled/whatever.
It will be interesting to see what happens in the cargo market......that is for sure.
Please don't take this as a personal slam to any DHL employee. I know several and I'm sorry you guys are taking it in the shorts for your management's short sided, poorly planned, market strategy. Godspeed on your journey guys/gals.
Last edited by bustinmins; 11-17-2008 at 05:51 AM.
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