Carrier News

DHL buys Airborne's ground operations; UPS gets a makeover

Tempe, AZ — March 25, 2003 — Confirmation came today that express mail DHL will buy rival Airborne's ground operations in a deal that will make the German company the third largest carrier in the U.S. market.

And in other news out of the carrier sector today, UPS announced a new look that includes the first redesign in more than 40 years of the company's famous "shield" logo.

DHL, a division of German postal service Deutsche Post, is set to pay about $1.1 billion for Airborne's ground operations, which will operate, under the DHL brand, along with DHL's existing U.S. ground operations.

Upon conclusion of the acquisition, Airborne's air operations will be separated from its ground operations and will become an independent public company, called ABX Air, which will be wholly owned by Airborne's current shareholders.

"The UPS/FedEx duopoly has a 79 percent share of the U.S. express delivery market, and the combination of DHL and Airborne will enable us to create a much stronger competitor, which will benefit a broader range of express delivery customers," said Carl Donaway, chairman and CEO of Airborne, who will become the CEO of the enlarged DHL business in the United States.

"We see great opportunity for DHL to build on the capabilities of the new combined company in the U.S. market, especially in the underserved small- and medium-sized business segments," said Uwe Doerken, CEO of DHL Worldwide, "and we are prepared to make a substantial long-term marketing investment to build a strong competitor able to provide increased value for U.S. customers."

Airborne is the third largest air overnight parcel carrier in the United States, with an 18.8 percent market share in the air overnight category, delivering approximately 356 million domestic parcels in 2002. Although DHL has the leading market share in international express delivery outside the United States, it has less than a 2 percent share of the U.S. air overnight domestic market today.

The transaction, which is subject to shareholder and regulatory approvals, is expected to be completed during the summer of 2003.

Makeover for UPS

Meanwhile, one-half of the dominant duopoly, UPS, today took the wraps off its new look, a change that the company said reflects the broadening of capabilities that has occurred in recent years as the company expanded across the globe and introduced a portfolio of new supply chain services.

The most visible change to the UPS logo is the removal of the bow-tied parcel that appears atop the shield on the logo. Ironically, even though the small bow had become one of the most recognized features of the company's logo, packages with string have not been accepted by UPS for several decades because the string can get caught in high-speed sorting machinery.

While brown will remain the primary color representing UPS, the company said that other new, complementary colors will become part of the design of aircraft, packages and other assets.

The changes reflect the carrier's expanded capabilities and global reach, according to UPS Chairman and CEO Mike Eskew. "UPS is a vastly different company today than most people realize," Eskew said. "Today we are bringing our look up to speed with our capabilities."

UPS currently offers freight services by any mode of transportation, international trade management, customs brokerage, consulting and supply chain management, financial services and e-commerce solutions. Most of these services are offered under the company's recently formed Supply Chain Solutions business unit.

Accompanying the visual changes on the logo, UPS is adding the phrase "Synchronizing the World of Commerce" to the design of the company's aircraft and familiar brown package cars. New advertising also will include the "synchronizing commerce" theme.

"We believe that 'synchronized commerce' is the next evolution of global commerce, where the three flows of trade — goods, information and funds — are seamlessly connected to benefit businesses worldwide," said Eskew.

In addition, UPS has expanded its retail presence through the acquisition of Mail Boxes Etc. Last month, the company announced it would provide Mail Boxes Etc. franchisees within the United States the opportunity to rebrand their stores under the name The UPS Store.

The carrier will have its work cut out for it in undertaking the makeover. The company said the UPS logo appears on more than 88,000 vehicles, 257 large jet aircraft, 1,700 facilities around the world, 70,000 drop-off and retail access points, more than 1 million uniform pieces and more than 3 billion packages annually.

According to Eskew, UPS had planned to unveil the new logo today at events around the world, but significantly scaled back on those plans as a result of current events in the Middle East.

The logo now being replaced was designed in 1961 by Paul Rand, a renowned brand designer who also was responsible for the logos of IBM, ABC, Westinghouse and Yale University, among others.