DHL Express announced that it will sell its UK domestic parcel business to Home Delivery Network(HDN), the UK’s largest dedicated home delivery and collection service, to fully concentrate on its
Time Definite International and Same Day express services, both internationally and throughout theUK.The agreement is limited to DHL’s domestic parcel business, also known as the Day DefiniteDomestic business, focusing on shipments that are delivered within the UK on a certain day ratherthan at a specific time of the next day. HDN will take over all employees and facilities of thebusiness as part of the contract under which DHL plans to transfer its UK day-definite parceloperations to HDN by the end of the first quarter 2010.
In order to leverage the core strengths of both companies, the parties have entered a widerpreferred supplier relationship, under which HDN will continue to use the DHL Domestic brand in theshort term.
The combined businesses will have annual sales of more than £600 million delivering more than180 million parcels a year, HDN said in a statement.
“We are confident that this move will help us improve the overall quality of ourinternational services while at the same time enhancing domestic parcel services for UK customers,”said Ken Allen, Chief Executive Officer of DHL Express. “The agreement allows us to concentrate ourresources on further growing the profitable express businesses.”
DHL stressed that this combination of HDN and DHL Domestic will enable domestic parcelcustomers of both companies to benefit from a wider range of services. Furthermore, the agreementalso covers joint customer management processes as well as a preferred supplier status of DHL forlogistics services.
Ken McCall, CEO of DHL Express UK, said: “It was important to us to divest our own parcelbusiness to a company that we can trust. HDN is a strong and well-respected player in the B2C fieldand thus ideally complements the B2B focused services we currently offer. This will certainlycreate an unrivaled service for all UK domestic parcel customers. We remain committed to ensuringour domestic parcel customers receive DHL’s usual high standards of service and will work closelywith HDN to ensure a smooth transition process. It will absolutely be business as usual for thesecustomers.”
HDN will continue to provide B2C delivery services for the combined customer base. Theirincreased scale is expected to result in a more efficient business which will help withstand theintensifying competition from a wide range of traditional B2C and B2B carriers, as well aschallenge Royal Mail more effectively, HDN added in a statement.
“This transaction is great news for customers of both HDN and DHL Domestic. The growth ofe-commerce has transformed our marketplace and with it the demands of our customers. Combiningthese businesses will enable us to offer our clients a wider variety of propositions and a moreefficient service. However, our immediate focus will be to maintain the exceptionally highstandards of service that our customers have come to expect from both businesses,” said BrianGaunt, HDN chief executive.
DHL Domestic currently employs some 4,700 people and operates five hubs as well as 71 ServiceCentres spread throughout the UK. The company’s domestic parcel unit will continue to use a widerange of DHL services such as air transport, IT and financial services as additional support. Itsother domestic businesses including DHL Freight, DHL Global Forwarding, DHL Supply Chain, DHLGlobal Mail and Williams Lea will not be affected by this transaction.
With around 50,000 employees working for DHL Express, DHL Freight, DHL Global Forwarding, DHLSupply Chain, DHL Global Mail and Williams Lea, DHL remains one of the biggest employers in theUnited Kingdom.
