StarBulletin.com

DHL to end domestic service


By

POSTED: Tuesday, November 11, 2008

Hawaii companies that used DHL U.S. Express will have one less choice to get their goods and business supplies or communications to the neighbor islands; however, other logistics and express companies say they are poised to accept the business.

Deutsche Post World Net, DHL's parent company, announced yesterday that the company's domestic-only service will end Jan. 30. International shipping to and from the U.S. will remain intact. These measures will allow DHL's U.S. Express business to reduce its operating costs to less than $1 billion from $5.4 billion, a decrease of more than 80 percent.

  “;This is the right move for our U.S. Express operations given the current economic climate and for the long run,”; said John Mullen, global chief executive of DHL Express.

While it is not known immediately how many Hawaii employees will be impacted by DHL's repositioning, the company has announced it will cut 9,500 U.S. jobs when it closes its U.S. ground hubs, and reduces the number of stations to 103 from 412. The company said it will retain 3,000 to 4,000 U.S. Express employees, tailored to the needs of international express customers.

As rumors have begun to circulate about the direction of DHL's U.S. presence, Courier Corp. of Hawaii has seen an uptick in inquiries about taking over those accounts, said Nick Smallwood, CCH's chief executive.

“;We are already performing those services in Hawaii and we are ready to accept their business,”; Smallwood said, adding that he anticipates an increase of 1,500 to 2,000 packages a month as a result of DHL's decision to close its domestic side.

In the past, CCH has assisted DHL with overflow, he said.

In most instances, clients will pay anywhere from 15 to 25 percent more to use CCH; however, the company also picks up later and delivers earlier, he said.

Likewise, United Parcel Service of America Inc. has the ability and the capacity in its network to fill the gap left by DHL, said UPS spokesman Norman Black.

“;DHL was a strong competitor, but quite frankly there is nothing that DHL has ever offered that comes close to the breadth of services that UPS can offer,”; Black said.