How to Trash 3 Years of Hard-Earned Goodwill in Two Poorly-Planned Weeks August 2006 Update
Written: Sep 22 '05 (Updated Aug 11 '06)
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Pros: They’re less expensive than Brown and Fedex
Cons: They are willing to trash $100,000 in annual business for $600 in late bills.
The Bottom Line: Their back office incompetence makes them not worth using.
We're going to find alternatives.
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| Saxguy's Full Review: DHL USA |
August 11, 2006: DHL is now attempting to DESTROY it's customer base. We've decided to find alternatives. The part below the plusses (++++) is the original review.
For the record, we do over $100,000 in business with DHL annually. Our corporate cash balance permits us to pay our bills in a timely manner.
We have had a continuing problem with getting their invoices paid for the last few months and have devoted heavy staff time in reconciling the accounts, because DHL started reusing their invoice numbers
No competent accounts payable corporate software can handle two DIFFERENT invoices with the same invoice number. In this control environment, organizations have to protect against making duplicate payments. Of course, duplicate payment checks verify vendor and account number.
So, we added a letter to the end of account numbers and paid what we could. We have been expediting their payments.
The kicker? Last week, we received an email from a collection agency that DHL referred us to that gleefully (at least it seemed that way) announced that there would be no more pickups until we paid all our outstanding bills. This was a shock as we had been working with DHL people and were given no notice at all that a referral was pending.
We have more than 30 accounts generating over $100,000 annually. The alleged overdue balance on the three accounts is under $600. DHL also has an unapplied crdit on our account of over $3,000 due to the invoice number problem.
Earlier today, I listened to one of my colleague, who had to get a package out, ask an employee to send the package through Fedex with a corporate credit card.
I then told a MeridianOne manager that DHL is willing to jeopardize a six figure account for a few hundred dollars. I told him that we have been devoting too much staff time in rework to their account. I also told them that if the account is not cleard up in a week, then I would do whatever it took to find an alternative. He agreed with me, said that the matter had been escalated to the MeridianOne President and DHL had not gotten back to them.
The agency said that there were three accounts in default. We had not been informed of ANY defaults despite our heavy efforts in reconciling and paying the account. The collection agency had contact information that was two years out of date on one account.
Even worse, we asked the collection agency to fax the invoices in question and they said that they couldn't do that. We had to wait for them to come in the mail. This for an overnight courier!
As a corporate controller, in this era of having to do more work with less people, I need reliable processing systems. I need to make as many transactions routine as possible. A vendor that necessitates extra effort in working with them becomes a very obvious irritant.
We switched from UPS to DHL's predecessor, Airborne Express. because they made it easier. That's not true any more. DHL is becoming increasingly difficult to deal with.
I said before that we were evaluating alternatives. It not evaluating any more. We are SEEKING alternatives. Even UPS, who assigned new salespeople to our account and seems open on pricing, seems better.
My recommendation is now:
Don't Use DHL
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We had brought in DHL as an alternative to UPS a few years ago as a result of unilateral price increases by UPS and their refusal to include our rural offices on our account plan due to their cost of servicing.
Enter DHL. DHL, a European vendor, had acquired Airborne Express, a US company and was actively competing with UPS and Federal Express on price. DHL offered to include our rural offices, give us a discount of 20% from their list price and provide training for our business units on their shipping methodology.
We were introduced to them through an intermediary organization, MeridianOne, who acts as intermediary for purposes of account administration and training. They receive a commission from DHL for that.
During this time, we processed our shipments one of two ways:
First, if something had to go overnight to an urban area, a business unit was free to use their preprinted label and drop the item in our DHL drop box. We had the urban requirement, because, quite honestly, DHL’s processing and timing reliability was fairly close to UPS and Federal Express on items shipped to urban areas, and not quite as reliable on shipments to rural areas. The second method was for a ground or second day shipment, the package would be routed to our mail room, who had software that would determine the least expensive way to ship.
During this time, the consensus was that DHL was adequately reliable at a lower price than the competition. Over the past 2 ˝ years, we had spent $130,000 with them.
Certainly we had our issues. Other than the reliability, we also had difficulty with their cash receipts folks. A couple of our accounts were put on credit hold because they misapplied funds. Our payables staff was spending an awful lot of time trying to straighten it out. Then, they sent one of our accounts to a collection agency after they left 3 messages on an extension for an employee who left. The voice mail on the line opened up with “I am no longer an employee, please call this extension instead”. While we were at least partially responsible for not disabling the extension, I also thought their collection people weren’t very thorough. Until last week, though, none of these issues was enough to keep us from using them when they were the least expensive and reliable enough.
This week, our mail room supervisor sent out an email saying that DHL was experiencing delays on next day air and second day air deliveries, due to integrating two distribution hubs in Ohio, one former Airborne and one DHL. The email said that DHL expects delays to last until the end of the week on next day air and second day air deliveries.
I also ended up doing a wire transfer today, at a fee of $25 because a check we printed last week and set overnight by DHL had not been delivered yet. I really detest rework. DHL has to know that reliable service is a given in the delivery business, and price matters only if the service is performed competently.
Trouble is, we don’t have a lot of alternatives. UPS has good quality. They will be happy to do business with us, at full retail price. Our $50-60K per year would not be enough to earn a discount, and our budgets will not permit full retail price. Then there’s Federal Express. They wouldn’t give us the time of day, when we had DHL bidding for our services. Earlier today, I talked to the mail room supervisor, who mentioned Express Mail from the US Postal Service. However, I’m not sure I trust them and we will still be paying full retail price.
So, the search is on once more to try to find a reliable delivery vendor at a reasonable price for ground and expedited packages. Trust, once lost, is very hard to regain. This conversion must have been poorly planned. Surely DHL knows how important reputation and reliability are in the delivery business.
Here is a list of DHL’s current domestic service offerings:
DHL Same Day Service
This gets the package on the next flight out. We don’t use this service much
DHL Next Day 10:30 am
DHL Next Day 12:00 pm
DHL Next Day 3:00 pm
DHL 2nd Day
These ostensibly promise overnight delivery a specific time on the next or following business day, but they say on their web site “delivery time may vary based upon origin and destination”. This gets moderate use at our place, depending on what needs to be sent and where and also the deadlines on arrival.
DHL Ground
This promises delivery through the US in 1-6 business days. We have been increasing our use of this, as it is a lower cost alternative.
DHL@home
This service is for business-to-residential service in the contiguous 48 United States. We do not use it much
DHLmediamail@home
Expedited service for media shipments from businesses to residential locations. The sender can choose from either standard or deferred service with last mile delivery through the local post office. We do not use this service at all.
DHL Ship Ready (Formerly known as Flight Ready)
This service uses prepaid flat-rate envelopes, the same size as a typical overnight envelope. There are no weight restrictions, but everything has to fit in the envelope. My organization uses this to a modest extent and I have used it personally, with good results.
DHL SmartMail
This product offers a fast cost-effective way to send mail nationwide without delivering it to the post office.. We do not use it.
You might be interested in some of my other reviews in this category:
There’s A Reason Why The Justice Department Shut Them Down (on KPMG Tax Services)
What Can Brown Do For Us? Not a Thing (on UPS)
ADP PC Payroll for Windows
Cedant Web Hosting
Thanks for reading. God bless!
Recommended:
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