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Despite heavy writedown, market speculation, carrier says it has no plans to exit. However, parcel analyst contends that shippers may see a scale back in operations.
BONN, Germany and PLANTATION, Fla.-Sending the message that they are still committed to the U.S. market, Deutsche Post World Net (DPWN), the parent company of express services and logistics services provider DHL, said last month it is taking an $874 million non-cash writedown on DHL Express operations in the U.S.
An AFX news report said this writedown includes adjustments on the value of some of DHL's fixed assets, such as aircraft, trucks, property leases and office equipment.
This news followed reports from investment banks Morgan Stanley and Bear Stearns that indicated that pulling out of the U.S. market and scaling down domestic operations may be DHL's best move. In 2003, DHL purchased Seattle-based Airborne Express for $1 billion. Since then it has faced an uphill battle for market share, with DHL competing against industry bellwethers UPS and FedEx, as well as the United States Postal Service (USPS). DHL said it has invested more than $3 billion into the U.S. since 2003, including $1.2 billion in infrastructure and distribution.