Neither Rain, Sleet Nor Scuds Stop DHL

It is a jet-age pony express, ducking Scud missile attacks to get parcels to businessmen when even the post office is closed.

Toting gas masks and antidotes for Iraq’s poison gas, drivers for DHL International thread their way daily through Saudi Arabia’s sun-baked Eastern Province, close to the front lines of the Persian Gulf War.

It is a tricky business. Air raid warnings have delayed cargo-laden DHL turboprops headed for outlying towns. Scattered airport closings have forced DHL to rely on trucks, slowing deliveries.

“We’ve been able to maintain service,” said Graham K. Davey, manager of DHL’s 17-country Mideast region. “But we’ve had to duck and weave at times.”

DHL isn’t the only cargo firm moving packages around the war-torn Middle East. Seattle-based Airborne Express has delivered everything from documents to tanks with the help of a Lebanese freight forwarder.

But DHL is by far the largest freight handler in the region, with about 60% of the $130-million Middle Eastern market. In Saudi Arabia, DHL’s only competitor is the national postal system.

Although it dominates the region, DHL’s Middle Eastern sales are a fraction of the $1.9 billion it takes in worldwide. The war isn’t expected to affect Mideast sales much. War-related shipments should make up for a drop in regular business since the conflict started, DHL executives say.

DHL has increased its security since the war. Every parcel is X-rayed, and many are hand-searched. Apparently, DHL thinks that its Mideast business is worth keeping despite the dangers.

“We have customers in the region. The demand is still there,” said Thomas E. Honey, marketing vice president of DHL Inc., the company’s U.S. arm, based in Redwood City.

John Pearson, DHL’s manager in Saudi Arabia, put it this way: “We are a lifeline to a lot of people. That concept carried us through the first few days.”

The Persian Gulf War comes at a challenging time for the cargo business. The recession has slammed the brakes on the industry’s growth. Analysts expect parcel shipments to remain flat this year, especially if the recession continues.

DHL should weather the recession better than Federal Express, United Parcel Service and other competitors that own air cargo fleets, analysts say. DHL “isn’t subject to higher fuel costs and other expenses, like landing fees,” said Edwin Laird, director of Seattle-based consultant Air Cargo Management Group.

As an airline without an international fleet, DHL depends on passenger air carriers to transport its cargo for a fee. The money-saving arrangement put DHL at the airlines’ mercy when war erupted. Many passenger airlines halted Mideast flights and reduced flights to other destinations.

DHL was forced to suspend shipments from the United States for two days after the war started. Since then, it has scrambled to find cargo space on airlines going into the 17-country region. Flight schedules through the area change almost daily.

In peacetime, DHL receives freight from outside the Mideast in Bahrain, the location of its sorting and distribution center. Since the war, flights to Bahrain have been suspended.

DHL now picks up cargo from outside the region wherever flights land--usually cities outside the war zone, such as Dubai in the United Arab Emirates or Muscat, Oman.

It hauls parcels by truck to Bahrain for distribution. The system is reversed for outbound parcels.

At times, outbound cargo takes a roundabout route to its destination. For example, the quickest way to Singapore is sometimes via London--16 hours round trip in the wrong direction.

Within Saudi Arabia--where DHL operates through SNAS, a wholly owned Saudi company-- DHL now relies primarily on trucks instead of planes.

Its Saudi network, with a staff of 40 that includes Saudis, Britons, Australians, New Zealanders, Filipinos, Indians, Yemenis and a Djiboutian, reaches virtually every desert town.

The expatriate staff lives in a compound with two villas. During nighttime Scud attacks, the employees have spent long stretches in a “safe room” in one of the houses. Windows have been boarded up to cut down on flying glass, and air conditioners were covered with plastic to prevent any poison gases from leaking into the room.

The room is stocked with extra food and water and has a radio tuned to FM 101.4, the ARMACO oil company station that is set aside exclusively to broadcast alerts and all-clear signals.

Although the number of Scud attacks has fallen steadily the past two weeks, 15 DHL drivers and couriers still travel with gas masks and self-injection medicine to counter the effects of chemical agents Iraq has threatened to use.

There are times when delivery schedules have taken DHL couriers unwittingly close to danger. Recently, a turboprop flew into Khafji with a single delivery just hours before Iraq attacked the border town.

But like the rest of Dhahran, DHL employees have adjusted to the new, more dangerous tempo of life with a shrug and few complaints. “It has been difficult, but fun,” said Davey. “Every day it is something new--like bits of a jigsaw coming together.”

Denise Gellene reported from Los Angeles and David Lamb reported from Dhahran, Saudi Arabia.