Air Freight Rate Increase

Issue 30, September 20, 2007

During the past few months, the Latin America market has experienced a growing imbalance between the northbound and southbound traffic. Northbound volumes from South America continue to decrease more than originally forecasted. Adding to this dilemma is the growing capacity needed to accommodate the natural southbound volume increase typically experienced during the third trimester of every year. This in addition to the volatile fuel situation and the weakening US dollar exchange rate with Latin American trading partners have had a dramatic and negative impact on airline cargo operators servicing the region.

Even with this difficult market environment, DHL Global Forwarding has until now mitigated the capacity shortages by proactively increasing its allocations and securing additional long term Blocked Space agreements with carriers servicing this market.

At this point, the carriers do not see a quick and lasting resolution for the imbalance of capacity, which has developed, so they are imposing rate increases in selective markets. These increases were passed onto DHL Global Forwarding as far back as August 1, 2007 and we have continued to receive rate increase notifications with the most recent one coming just last week.

Until now DHL Global Forwarding has absorbed much of the increase trusting the market would adjust itself and rates would fall back in line. Unfortunately, that has not happened and as a result we can no longer absorb these airline increases. Therefore, with effect October 1, 2007 we are forced to impose a rate increase from the USA to selective Latin American markets as outlined below. In view of the fact that the airline increases are complicated and each airline uses a different rating methodology, it is our intent to not simply pass on a flat general increase to our existing valued customers. Instead, we will be reviewing each customer’s tariff and only adjust rates in those markets where an increase is necessary.

Your DHL Global Forwarding Sales/Customer Manager will be contacting you in the very near future to review this further.

Sincerely Yours,

Brian Lindholm
Executive Vice President and Country Head - USA