Exit from US domestic express market
As the largest express market in the Americas, the United States holds a unique position. It is connected to the world’s principal trade lanes and some 49% of all DHL shipments are billed there, where nearly half of our 200 largest customers are based.
After the takeover of Airborne in 2003, we worked to make our domestic business in the United States a success and to establish DHL as the third major player in this duopoly market. However, today we must concede that our positive operational achievements did not translate into financial success. Ultimately, the weak US economy, exacerbated by expectations of a global recession, increased pressure to such an extent that we were forced to find a viable solution in the interests of our shareholders, employees and customers.
In November 2008, we decided to exit the US domestic express business by the beginning of 2009. We are re-focusing fully on our core competency – the international express business. In the future, the United States will remain an integral part of our global network, the scope and capacity of which guarantee us a leading position in the express market. In the year under review, our share of 9% (2007) in the US international express market allowed us to again remain competitive and to solidify our market position.
In the international express business in Latin and Central America, DHL is the market leader with a share of 36% (2007) and is growing robustly. Although international volume growth has slowed as a result of the poor US economy, the domestic express markets experienced dynamic growth, particularly in Mexico and Venezuela.
Slowdown in Europe intensified
In 2007, the European market for courier, express and parcel (CEP) services increased to €15.3 billion, up from €12.1 billion a year earlier. E-commerce was responsible for most of this growth, whilst the addition of Eastern European countries to the region during the reporting period also played a role.
In 2008, the economy negatively impacted volume growth. Moreover, air express shipments continued to decrease in favour of more economical ground transport.
We maintained our leading position in Europe’s international CEP market, even broadening our position in Eastern Europe. In terms of growth, we outperformed the market on many trade lanes, especially to and from Asia and Eastern Europe.
We expanded our services in time-definite deliveries, which we now offer in 55 countries. In Europe, we are presently able to deliver to more than 94% (previous year: 80%) of all business addresses by 12.00 pm.
This success is in large part thanks to our new intercontinental hub at Leipzig/ Halle Airport, which we put into operation as scheduled in May 2008, following just three years of planning and construction. The Group invested around €300 million in the facility, where each working day some 60 aircraft take off and land and around 1,500 tonnes of freight are handled. This has enabled us to increase the number of direct flights within Europe and beyond. We maintain connections to 46 countries on three continents.
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