The Issue: DHL Turns to Rival UPS

Shortly after DHL Express was purchased in 2002 by privatized German postal service Deutsche Post World Net (DPWGN.F), the yellow-clad global delivery service launched an ambitious assault on United Parcel Service (UPS) and Federal Express (now officially FedEx) (FDX), the two mainstays of the U.S. express-delivery market. DHL acquired Seattle-based Airborne, the third-largest player, for a little more than $1 billion in 2003. And DHL made explicit appeals to customers of the more established competitors with marketing slogans such as "Yellow. It's the new Brown": a challenge to UPS' highly recognizable brown trucks.

DHL has made impressive strides in the past six years. It raised awareness of its brand. It built an impressive air and ground network covering the U.S. And it made a significant impact on the market's dynamics. "We've created a third choice which was not there before, a real threat to the competition," says John Mullen, chief executive of DHL's global business.