DHL Express is to discontinue its loss-making US domestic services on 30th January 2009 and focus entirely on its international offering.
The company will also be restructuring the US business in a bid to reduce operating costs by more than 80 per cent, helping it to meet its financial targets.
The company has said 71 per cent of all international shipments to and from major metropolitan areas will benefit for improved transit times and a further 25 per cent will see no change.
International shipments into the US will continue to be delivered to all ZIP codes currently delivered to and outbound international shipments will continue to be picked up with no planned changes to service levels.
As a result, DHL Express will close all of its US ground hubs, reduce the number of stations from 412 to 103 and retain 3,000 to 4,000 US-based employees who are tailored to the needs of DHL’s international express customers.
These measures will allow DHL Express’ US business to reduce its operating costs from the current $5.4 billion (4.2 billion euros) to less than $1 billion (770 million euros), a reduction of over 80 per cent.
John Mullen, global CEO of DHL Express, said: “Since our announcement on 28th May, we have been diligently implementing our stated restructuring plan and we are ahead of meeting all key components of the plan. However, given the current background of unprecedented uncertainty and risk in the global economy we feel that it is critical and prudent to take additional measures to combat what we believe will be an extremely challenging 2009, and to do this ahead of time.
“This is the right move for our US Express operations given the current economic climate and for the long run. When we looked for efficiencies in the US Express market, we decided to focus on what we do best as a company, and that’s international shipping.”