DHL finally announced on November 10th that it will stop domestic air and ground service by January, 2009. Rumors had been swirling around the shipping industry for some time about DHL exiting the US market. Many articles and posts have already been written about the layoff of DHL employees (roughly 9500) and the slow down of the economy which is partly to blame. However another group little known victims of the DHL US shutdown are the DHL resellers. DHL was the only one of the three big shipping carriers that used resellers to get small and midsize business. It was a win-win-win for DHL, the reseller and the shipping customer. DHL licensed discounted rates to the DHL reseller and the reseller signed up clients by passing on some of the discount to the customer. In many cases small and midsize businesses were able to get rates that were comparable to the discounts only available to large fortune 500 companies. Another advantage to the customer was the ability to get personalized customer service from the reseller instead of having to call the DHL 800 number; toll free customer service agents are usually entry level personnel. This means that ironically you are speaking with the least experienced person at the carrier when trying to locate a lost item; hence the frustration experienced by most 800 number callers. However with this business model DHL was effectively able to pass allot of their infratructure costs off to the reseller. Imagine the losses had they not done that!!
Regardless of the DHL US down fall this was an excellent business model that would be worth pursuing by either Fedex and UPS or both. This model can help save on infrastructure costs such as billing and customer service and lead to greater customer service satisfaction. Of course the shipping company has to follow through with exceptional service and this was the main problem with DHL US. Towards the end…DHL resellers were being bombarded by customer complaining that DHL did not pick up their packages etc.
I guess we should have all seen his coming when DHL effectively “outsourced”their air shipment to UPS back in May. Oh well…as that famous lyricists once wrote “Another one bites the dust..boom…boom…boom.”
Your How to Ship advisor
