Service loss may not affect DHL proposal
The announcement by Deutsche Post World Net, parent company of DHL Express, that it will discontinue its US-only air and ground services, resulting in the loss of 9,500 jobs, will likely not kill a proposed vendor contract with UPS.
DHL and UPS have been negotiating an agreement under which UPS would provide air transport services for DHL's North American business for 10 years. Two independent airlines currently provide those services.
“[The announcement] could affect the size and scope of the contract, but we are continuing to negotiate,” said Malcolm Berkley, a spokesman for UPS.
If the contract is finalized, UPS would only ship DHL's international shipments from their US landing points to their ultimate US destinations. The proposed contract also had come under scrutiny by some members of the US Senate, who said it might violate antitrust laws, or precipitate a merger. Both UPS and DHL denied those allegations.
ABX Air Inc., which currently provides air cargo transport services for DHL, said that DHL has not made any commitment about what it will require to operate its US network after January.
“We intend to continue to provide excellent service to DHL customers, so long as our commercial agreements with DHL remain in effect,” said Joe Hete, president and CEO of Air Transport Services Group, which owns ABX.