DHL Adds Supply Chain Services, Signs Sun

Known to Americans mostly as a rival to UPS and FedEx in package shipping, DHL now plans to add supply chain management and logistics to its services for North America and Latin America.

European-based shipping giant DHL has added supply chain and logistics services such as distribution warehousing and order management to its package delivery services throughout the Americas, meanwhile signing Sun Microsystems Inc. to a three-year outsourcing and IT co-development deal.

In an ambitious expansion move, DHLs three previous business units for the Americas—Express Logistics, DHL Logistics Services, and Solutions—are being consolidated into a single unit, dubbed DHL Solutions Americas.

From headquarters in Plantation, Fla., DHLs newly restructured Americas division will report to the companys international DHL Solutions arm, a DHL spokesperson said.

In the deal with Sun, rolled out Monday along with the reorganization plans, DHL will outsource management of Suns after-market service supply chain on a global basis.

DHL and Sun will also co-develop a global IT architecture especially geared to service parts logistics management.

The new system will be aimed at replacing a number of regional IT systems currently in use by Sun, so that Sun can perform real-time monitoring and management of its worldwide service parts inventory and customer order processing functions.

Other customers of the new DHL Solutions entity include Hewlett-Packard Company, Wal-Mart Stores Inc. and Siemens Business Services.

"We are looking to grow our business by offering an alternative," the DHL spokesperson told Ziff Davis Internet. "But we are not trying to compete with any one, specific company."

As some analysts see it, however, DHLs move is targeted mainly at UPS (United Parcel Service Inc.).

"UPS Supply Chain Service has been growing [particularly] fast," said Robert Persuit, an analyst at SJ Consulting Group.

/zimages/6/28571.gifClick here to read more about UPS worldwide wireless strategy.

"Recently, UPS has been focusing on extending its Supply Chain Service back to sources in China, for example," the analyst told Ziff Davis Internet.

In recent times, DHL has been aggressively expanding its shipping business in the United States versus both UPS and Federal Express Inc.

"This weeks announcements and DHLs earlier purchase of Airborne Express are both clear indications that DHL is very serious about competing in the U.S. market," according to Persuit.

In addition to providing new services, the reorganization of DHLs Americas branch will simplify international shipping for customers in the Americas by letting them use DHL as a single provider, according to the DHL representative.

DHL expects to aim the new supply chain management/logistics outsourcing services at users in the electronics, telecommunications, CPG (consumer packaged goods), automotive, and life sciences industries.

The outsourcing and IT co-development contract with Sun originated with a relationship in the Asia Pacific region, where DHL has been Suns service parts logistics provider for the past four years.

DHL Solutions will manage and implement the contract. Another DHL arm, GCS (Global Customer Solutions), will provide customer coordination across DHLs international network.

Beyond the headquarters office in Florida, DHL will maintain its facilities in Wilmington, Ohio, the former home of DHL Logistics Services—once known as Airborne Logistics Services—and Express Logistics, the DHL spokesperson said.

Express Logistics and DHL Logistics Services both served all of the Americas.

On the other hand, the Americas branch of Solutions served only the nation of Brazil.

DHL also plans to retain all employees of its three previous branches for the Americas, while bringing in some staff from Europe and making a substantial number of new hires in North America and Latin America.

Right now, the company employs about 3,500 people worldwide.

"DHL is in hiring mode," the company representative told Ziff Davis Internet. "There will be a net expansion."

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