First Of The Big Dead Wood: DHL To Stop All Express Deliveries in the U.S.

The DHL unit of Germany’s Deutsche Post (DPWGN.DE) announced today that it will stop making express deliveries within the U.S., close all of its 18 main distribution hubs there, and lay off all but a few thousand of its remaining 13,000 U.S. workers. Although it will still continue to make delivers to and from the US and other countries.

DHL purchased Airborne Express in an attempt to challenge FedEx (FDX) and United Parcel Service (UPS), but has lost nearly $10 billion in the US market in the 5 years since that purchase. The company is actualy a dominant force in the global market, but it was never able to compete with the stronger UPS and FedEx on American soil.

DHL’s failure in the US is a perfect example of the financial crisis knocking off the weaker players in the market. Financial crises always favor the larger companies, and society as a whole comes out the other side stronger because of that. Whether is was poor management or just a series of bad luck that plagued DHL’s US business, the fact is, they didn’t compete on the same level as UPS and FedEx, and now they’re out of game.

This will undoubtedly be the first of the big dead wood, meaning we’ll see markets where 2 or 3 or more companies are competing for limited resources, and the weaker ones won’t be able to survive this financial crisis. The lean times are here.