DHL Corporation and Subsidiaries - Page 7

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          entities, the two operations were allowed to develop separately             
          in a manner that best suited local expansion and success.                   
          Although DHL and DHLI generally operated separately, certain                
          physical facilities were operated for their joint benefit, and,             
          occasionally, the companies used networkwide compensation                   
          incentive plans for their executives.  At executive levels, there           
          was commonality and “secunding” (sharing) of employees by and               
          between DHL and DHLI.  At the shareholder levels, there was                 
          common control of DHL and DHLI.                                             
               The companies making up the DHL worldwide network cooperated           
          through the Network Steering Committee (NSC), composed of DHL               
          shareholders, senior management, and representatives of the three           
          principal corporations, DHL, DHLI, and Middlestown, N.V.  The               
          NSC’s purposes were to establish network policies and strategies,           
          address each company’s network rights and obligations, and                  
          present a uniform organizational image to DHL customers                     
               One of the things that led to the success of the DHL network           
          was the use of a flat-rate pricing structure, where the customer            
          was charged a monthly rate for all shipments.  Under this                   
          approach, profit was sought on the consolidation or volume                  
          strategy.  DHL also developed color-coded pouches with                      
          distinctive markings that were known to customers and made                  
          package handling easier and more efficient.                                 

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Last modified: May 25, 2011