DHL Corporation and Subsidiaries - Page 109

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          consistent losses on internal domestic shipments and profits on             
          its outbound shipments that originated domestically.                        
               In 1986, DHL retained Bain & Co., Inc. (Bain), to advise it            
          on how to return to profitability.  Bain analyzed DHL’s cost                
          structure and, in 1987, developed a cost model specifically for             
          DHL.  Before that time, DHL did not specifically account for cost           
          data by product line.  Bain demonstrated that DHL’s revenue from            
          an outbound shipment was greater than that from a domestic                  
          shipment, and customer density in a coverage area was extremely             
          important to profitability.  Bain made recommendations based on             
          these findings, many of which were implemented and had a positive           
          impact on DHL’s financial performance.  In order to deal with the           
          increasing debt, financial difficulties, and inability to enlarge           
          or compete domestically, Bain recommended that DHL consider a               
          merger with a company in the same industry.                                 
               DHL changed its business strategy during 1988, focusing more           
          on outbound shipments and less on domestic expansion.  The GSA              
          contract was allowed to expire, more effective cost control                 
          programs were instituted, and by the late 1980’s to the early               
          1990’s, DHL started showing profits.  The controlling                       
          shareholders began looking for a suitable company with which to             
          arrange a merger.                                                           

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