Chief among those challenges has been the lack of ground transport capability. DHL had virtually…

Chief among
those challenges has been the lack of ground transport capability. DHL had
virtually none when it was acquired by Deutsche Post, while Airborne was just
getting started. Now, with high fuel prices boosting the cost of air shipment,
the parcel market in the United States is shifting toward ground transport,
which is DHL’s weakest link. So DHL is investing $1.2 billion over the next
three years in sorting centers, drop-off points, and other network
improvements. Nationally, for instance, DHL has only 16,000 dropoff
points—about one-third FedEx’s number. “It takes a lot of money
»

Chief among
those challenges has been the lack of ground transport capability. DHL had
virtually none when it was acquired by Deutsche Post, while Airborne was just
getting started. Now, with high fuel prices boosting the cost of air shipment,
the parcel market in the United States is shifting toward ground transport,
which is DHL’s weakest link. So DHL is investing $1.2 billion over the next
three years in sorting centers, drop-off points, and other network
improvements. Nationally, for instance, DHL has only 16,000 dropoff
points—about one-third FedEx’s number. “It takes a lot of money and a lot of
talent to build a high-quality network. That’s a big hurdle,” says Kurt Kuehn,
senior vice president of worldwide sales and marketing for UPS.

»

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