HL divests itself of two Loss-making divisions
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COVER STORY
By Dominic Perry DHL HAS BEEN busy over the Christmas period, selling off two loss-making businesses: DHL Container Logistics and its MB and parcel operation known as Day Definite Domestic, a division of DHL Express (UK).
First to be sold was the container operation, which was snapped up by rival haulier Maritime Transport shortly before Christmas for an undisclosed sum, with the Felixstowe firm taking control from 1 January.
However, DHL dropped another bombshell as CM went to press. with the announcement that its DHL Express division was offloading its domestic parcel arm to Home Delivery Network (I IDNL).
The business will be transferred to HDNL by the end of Q1 2010, including some 4,700 people, five hubs and 71 service centres. The combined business will have an annual turnover of around £600m, £325m of which is from HDNL.
DHL Express says it will now concentrate on Time Definite International and Same Day express services, both in the UK and internationally, through its Servicepoint facilities.
Ken Allen, CEO of DHL Express, says: "We are confident that this move will help us to improve the overall quality of our international services while at the same time enhancing domestic parcel services for UK customers.'" HDNL has acquired the business to "allow it to challenge Royal Mail more effectively".
HDNL chief executive Brian Gaunt says: "Combining these businesses will enable us to offer our clients a wider variety of propositions and a more efficient service."
According to its latest set of accounts, for the year ending 31 December 2008, DHL Express (UK) made a pre-tax loss of £108.2m on turnover of £459.5m.
It was a similar story at DHL Container Logistics, which made a pre-tax loss of £2.9m on turnover of £55m in the same period and was heavily in debt to its parent firm.
Nonetheless, the deal with Airitime nansport, which creates the country's largest container haulier, is a good acquisition insists its MD John Williams.
He says: "It's a loss-making company, so we do have some pressure to resolve that situation as soon as possible.
"However, the integration is happening at the quietest time of the year for us, so we can put all our efforts into it."
DHL tells CM that it has no plans for any further sell-offs in the UK.
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