Last week, the US shipping community was startled by the announcement that Deutsche Post has decided to terminate its relationship with Astar and ABX Air (the legacy DHL Airways & Airborne Express airline) and use UPS for its domestic air carrier. An equally startling announcement to the DHL commercial sales organization was made yesterday. DHL proclaimed that it would be no longer offering its @home service product as of August 28. For the readership of PARCEL, this is a profound loss to the marketplace.
Airborne@home tendered its first packages to the USPS for residential delivery, using what was the newly offered Parcel Select DDU rate on July 1 of 1999. At that time, Airborne did not have a ground service per se, and the intent of the product was to fill the empty excess capacity on the daylight (2 day) air network. The product was a huge success, and from 1999 until the sale of Airborne to DHL on August 15 of 2003, I know it was the fastest growing product Airborne had. I am pretty sure that 2006 shipments over 2005 may have approached 100% year over year growth. Even last year, in a declining economy, I suspect the product grew by 25% year over year. The @home Standard service was a best in class offering.
It was for all intents, 3 days transit, door to door, from a cataloguer, Internet retailer, telemarketer, or multi level marketer to consumer. The product was priced significantly below Priority Mail, FedEx Express Saver and UPS 3 day. In some cases, below UPS ground residential. The service was a creative use of unused Airborne capacity resources and the unparallel capability of the USPS to reach every home, six days a week.
When Airborne added ground service later on, it gave Airborne a foundation to utilize the hub and the ground connectivity more efficiently.
The parcel consolidation space has had a series of tragic, and most times unexpected, exit of players over the last few years, with the most notable being the bankruptcy of APX on March 16 of 2006. That year we also saw the loss of DDU Express, Parcel Corporation of America (PCA), Total Logistics Services (TLS) and Parcel Logistics Inc (PLI). Now we are witnesses to the end of the DHL family of @home services.
For the most part, the shipping community is left with FedEx Smartpost (the former Parcel Direct) and UPS Basic. To a lesser degree there is also in the marketplace parcel consolidators, Blue Package and Newgistics.
Sadly, the revolutionary and pioneering work done by Airborne with John Kelly of the USPS in 1999 to truly marry the hub and spoke network capabilities of an air express carrier with the unique coverage of the USPS letter carriers comes to an end August 28.2008.
