DHL Corporation and Subsidiaries - Page 138

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          transfer fee was determined by multiplying the estimated number             
          of transfer shipments by DHL’s average cost of handling such a              
          shipment, and (beginning in 1988) by adding a 2-percent markup to           
          average cost.  Before 1987, DHL and DHLI/MNV did not employ any             
          method to determine the average cost per shipment or the volume             
          of transfer shipments.  From 1987 through 1990, the cost data               
          used in the transfer fee formula were taken from the PLP model.             
               The shipment volumes used in the transfer fee formula were             
          not readily available when the transfer fee was instituted                  
          because DHL did not focus on how shipments were routed.  To                 
          determine percentages of transfer shipments for 1987 and 1988,              
          the number of transfer shipments was estimated by counting                  
          shipments originating in or destined for a Latin American                   
          country, Mexico, and/or Canada, with appropriate adjustments, and           
          interviews with gateway managers.  For 1989, the number of                  
          transfer shipments was estimated by taking a percentage (based on           
          1987 and 1988 data) of international inbound shipments.  Annual             
          transfer shipments for 1990 were estimated by sampling transfer             
          shipments for 1 week, calculating a daily transfer shipment                 
          volume, and applying the percentage of daily transfer shipment              
          volume to total annual Western Hemisphere shipments.  The same              
          procedure was used for 1991 as had been used in 1990, but using a           
          2-week sampling.  A more refined transfer shipment cost                     
          calculation was devised for 1991.                                           






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