Washington, D.C. -- Today, DHL Express Global CEO John Mullen testified before the House Committee on Transportation and Infrastructure regarding the company's potential contract with UPS for domestic airlift and related services.
This pending agreement comes at a particularly difficult time - for the overall aviation industry including the air express delivery sector. The air cargo market has experienced increasing levels of excess air lift capacity, the impact of which has been substantially exacerbated by record increases in fuel prices. These record fuel prices, along with a significant slowdown in the U.S. economy have hit the domestic air express sector particularly hard. Due to this, DHL has experienced a slowdown in overnight air volumes, as have its competitors. These facts in combination with increasing costs will result in an expected $1.3 billion loss in DHL U.S. Express operations in 2008.
DHL has analyzed all realistic options and the proposed agreement with UPS is part of DHL Express' U.S. restructuring aimed at enabling the company to remain a viable competitor in the U.S. market while continuing to service its customers. This type of airlift arrangement is common in the transportation industry.
During the hearing Mullen stated: "Customers will see no difference as DHL will continue to pick-up and deliver packages as well provide customer service just as we do today. The exchange of information between DHL and UPS will only provide data necessary for transportation from point A to point B."
Mullen again emphasized that the pending agreement would not involve any merger, acquisition, alliance, or transfer of assets between DHL and UPS. "DHL will remain fiercely competitive with UPS and FedEx."
He stressed that as DHL has cooperated and provided information to the House Committee on Transportation and Infrastructure and the House Committee on Judiciary, they will continue to cooperate with all such requests. DHL informed the Antitrust Division informally of the proposed agreement on May 28, and would cooperate fully in any investigation the Division might choose to undertake.
DHL is the global market leader of the international express and logistics industry, specializing in providing innovative and customized solutions from a single source. DHL offers expertise in express, air and ocean freight, overland transport, contract logistic solutions as well as international mail services, combined with worldwide coverage and an in-depth understanding of local markets. DHL's international network links more than 225 countries and territories worldwide. Some 300,000 employees, including more than 40,000 employees in the U.S., are dedicated to providing fast and reliable services that exceed customers' expectations.