Thursday, November 09, 2006

DHL enters US cargo market with stake in Polar Air

Express delivery arm of the Deutsche Post, DHL has announced the purchase of 49 per cent stake in the United States-based Polar Air Cargo.

This, the company said is in the bid to strengthen its presence in the trans-Pacific parcel and freight markets.
In return for its $150m investment in Polar, DHL is to secure a guaranteed capacity on the airline’s routes across the pacific for upto 20 years.

Polar, which is known as one of the largest US cargo airlines, is owned by New York based Atlas Air Worldwide Holdings.

The deal represents a challenge to UPS and FedEX, the US express delivery groups, which currently dominate the tightly regulated market between Asia and the US.

DHL has a large parcel network in Asia and is also investing heavily in the US but before the Polar Air deal, it lacked its own air capacity between the two markets.

Demand for trans-pacific delivery services is increasing sharply as trade between the US and China soars.

Chief executive, DHL's express division, Mr. John Mullen, described the deal as a key strategy to ensure rapid growth in that part of the world.

"This key strategic partnership ensures we can meet the rapidly rising demand for air cargo capacities between the US and Asian destinations," he said.

It would be recalled that UPS and FedEX each have more than 20 weekly flights between the US and China and the routes have become a powerful source of growth.

The US groups have each ordered 10 Airbus A-380 Super jumbos to increase capacity across the Pacific.

DHL's investment in Polar is part of a broader battle for global dominance among the express delivery groups.
DHL's harmonised international network links more than 220 countries and territories worldwide.

DHL, said it would continue to be at the forefront of technology and, with over 170,000 dedicated employees, guarantees fast and reliable services aimed at exceeding customers' expectations.

Based in Brussels, Belgium, DHL is 100% owned by Deutsche Post World Net.

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