DHL cuts 9,500 jobs; UPS deal uncertain

ATLANTA — In a move that could greatly scale back a possible venture between UPS and Deutsche Post's DHL, the German company said Monday it will significantly reduce its air and ground operations in the U.S. and cut 9,500 jobs within the country.

The DHL-UPS deal was expected to last up to 10 years and infuse Atlanta-based UPS with up to $1 billion in annual revenue, if completed as first proposed in May.

UPS, the world's largest shipping carrier, has said the contract with DHL, which it has been working to finalize, would mostly involve the transport of DHL packages between airports in North America — not the pickup or delivery of DHL packages to customers.

If DHL made significant cuts to its ground operations in the United States, it wouldn't necessarily affect UPS and DHL's reaching a deal since their talks have solely involved air delivery of packages, not ground delivery. But Deutsche Post's announcement went well beyond the elimination of ground products within the United States. Deutsche Post said it will discontinue U.S. domestic-only air and ground products on Jan. 30 to focus entirely on its international offering.

Deutsche Post said its international shipping services to and from the United States would continue.

UPS spokesman Norman Black said his company would continue to work on an air-haul vendor contract with DHL. But, he added, "Today's announcement by DHL certainly could affect the size and scope of that contract."