Deutsche Post AG (DPWGn.DE: Quote, Profile, Research, Stock Buzz), the German parent of delivery company DHL, is expected to announce on Monday that it will sharply curtail its planned U.S. expansion, The Wall Street Journal reported on its Web site on Saturday, reuters reported.
Citing people familiar with the situation, the newspaper said the decision would likely be announced as part of Deutsche Post's third-quarter earnings release in Bonn, Germany.
A spokesman for DHL, which has seen billions of dollars of U.S. losses since its 2003 purchase of Airborne Inc., declined comment, saying the company would not make public comments just before its earnings report.
People briefed on the pullback, aimed at FedEx Corp. (FDX.N: Quote, Profile, Research, Stock Buzz) and United Parcel Service Inc.'s (UPS.N: Quote, Profile, Research, Stock Buzz) dominance, would not mean that DHL would totally disappear from U.S. service, the Journal said.
DHL is expected to continue its U.S. freight-forwarding operation, which employs thousands, and will continue handling international deliveries in the United States, the report said. It will also keep its own operations in major metropolitan areas.
But packages addressed to remote areas will likely be delivered by the U.S. Postal Service, it said, while DHL's domestic business, in which it was competing to transport packages within the United States, will be mostly shut down, the Journal said.
DHL is expected to follow through on an agreement with UPS under which DHL would outsource the airlift, or airport-to-airport leg, of its domestic U.S. delivery business to UPS, the report said.