DHL and Microsoft Collaborate to Ensure Timely Deliveries of the Next-generation Video Game Console

Plantation, FL / Redmond, WA (January 25, 2006) - The Xbox 360 launch, orchestrated by Microsoft Corporation (NYSE: MSFT) and its long-time logistics partner DHL, the world's leading global express delivery and logistics company, has proven to be a successful collaboration of these two market leaders as thousands of Xbox 360's have been distributed simultaneously in Europe and North America.

For gamers, the holiday season marked the start of a long-awaited adventure. For those working behind the scenes, the historic November 22 U.S. Xbox 360 product launch and the December 2 European rollout culminated a year's worth of planning and execution dedicated to one objective: Moving Xbox 360's across three continents on time and on schedule.

"Microsoft set specific deadlines and promised the world it would meet them. In so doing, Microsoft challenged DHL to think creatively, and to anticipate the unpredictable scenarios that often accompany a major product launch during peak season," said Jane Sabin-Pass, Global Customer Manager, DHL Global Customer Solutions. "The precise delivery schedules were a testament to the skill of both companies to link the global supply chain with flawless accuracy and transparency."

The Xbox 360 project drew upon 15 years of collaboration between Microsoft and DHL, which included the highly successful rollout of the first Xbox console in November 2001. Knowledge of each other's systems and processes played a vital role in expediting Xbox 360 launch schedules, reducing implementation lead times, and meeting strict deadlines.

Among the milestones of the Xbox 360 project:

	Enhancement of a trans-Pacific rail-steamship service where ocean freight shipments entering the Port of Los Angeles from Hong Kong were met at the docks by dedicated trains that carried consoles and accessories directly to Microsoft's North American distribution center in Memphis, Tenn. The service shaved several days off of the standard transit times and ensured predictable and cost-effective deliveries to support the initial rollout and subsequent replenishment of inventory.
	A unique aircraft loading solution for European air consignments enabling Microsoft to fully optimize the space aboard each aircraft without compromising the integrity of Xbox 360 units. Because the pallets' original height prevented them from fitting in the lower deck area of the aircraft, DHL Danzas Air & Ocean developed a program to "down-stack" each pallet at origin, load them securely into the aircraft belly for flight and then re-build the pallets into their original SKU configuration at destination.
	The enhancement of DHL's sophisticated event management tool that seamlessly connected Microsoft with suppliers, contract manufacturers, carriers and even other transportation providers to deliver near real-time visibility of in-transit inventory.

Launch planning began in November 2004 when both companies mapped out shipping strategies and laid the foundation for the robust I.T. network that would serve as the project's central nervous system. By August 2005, with the first of the Xbox 360s ready to ship, the project shifted into high gear. EDI messages from production sites in southern China enabled Microsoft and DHL to pro-actively update status information and maintain real-time visibility as Xbox 360's rolled off assembly lines onto barges bound for Hong Kong's Chek Lap Kok airport. As consoles and peripherals were loaded aboard charters, the DHL system automatically triggered "Advanced Ship Notices" to the U.S. and European distribution centers, providing the receiving points with the time to efficiently pre-plan their capacity needs.

At each step in the process, DHL's automated systems validated all shipment load information, guaranteeing the appropriate volumes of Xbox 360 units were delivered to the proper destinations at the agreed-upon times. To ensure proper redundancy, DHL created back-ups of each message transmitted.

Supporting the initial launch phase, DHL's regional team in Singapore led the implementation project deploying multiple Boeing 747 freighters procured by Microsoft to transport consoles from Hong Kong to the main distribution centers in Memphis and Dueren, Germany, 60 kilometers from Cologne. DHL staff in Hong Kong also arranged for commercial airlift to ship thousands of kilos of Xbox 360 peripheral equipment such as controllers, cables and other Xbox 360 accessories to North America and Europe.

DHL in Seattle and Cologne performed custom clearance and synchronized deliveries with Microsoft's distributors to ensure sufficient high security trucks were positioned to deliver the consoles from the airport to Microsoft's distribution centers in Memphis and Dueren. DHL Cologne then organized truck deliveries from Microsoft's distribution center to retailers across the continent.

The joint Xbox 360 effort is far from over. Charters continue to arrive in the U.S. and Europe. DHL has purchased significant ocean freight capacity to move consoles and peripherals long after the initial launch, and will continue to support the Microsoft roll out of Xbox 360s around the world. Microsoft and DHL are also now working jointly on implementing a new warehouse in Southern China to support fulfillment of Xbox 360 in Asia during 2006 and beyond.

"What we learned from Xbox 360 is that an agile supply chain -- one that employs a mix of transportation modes -- is an effective solution to the challenges of executing a global product launch and on-going replenishment activities," said Bill Best, Senior Logistics Manager at Microsoft. "DHL's sophisticated I.T. tools will be leveraged in future projects to power Microsoft's supply chain and enhance its competitiveness. We see DHL's solution as an enabler of future success, and we envision a deep integration of DHL into our processes as a result," continued Best.

"The Xbox 360 project is another step forward in our long and successful collaboration with Microsoft," said Eric S. Vargas, Head of Global Project Coordination & Program Management at DHL Global Customer Solutions. "Through the years, we've learned from each other, tested and challenged each other and, in the process, grown together. Microsoft has made DHL a stronger partner, and we are grateful to be able to leverage those qualities to bring a heightened customer experience to Microsoft and its customers and execute one of the most important product launches in its illustrious history."

About Xbox and Xbox 360
Microsoft revolutionized the gaming industry with the November 2001 launch of Xbox® (http://www.xbox.com), its first-generation video games and entertainment system, now sold in 26 countries around the world. This holiday season Microsoft debuts its next-generation system, Xbox 360, in Europe, Japan and North America, to be followed by availability in Australia, Colombia, Hong Kong, Korea, Mexico, New Zealand, Singapore and Taiwan in 2006. Xbox 360 is the most powerful video game and entertainment system ever created, delivering the best games, the next generation of the premier Xbox Live® online gaming service, and unique digital entertainment experiences that revolve around you.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

About DHL
At DHL, Customer Service is back in shipping. Our mission is to provide the most flexible, personable and enjoyable experience in the shipping industry for our customers.

With annual revenues over $32 billion in 2004, DHL is the global market leader of the international express and logistics industry, specializing in providing innovative and customized solutions from a single source.

DHL offers expertise in express, air and ocean freight, overland transport and logistics solutions, combined with worldwide coverage and an in-depth understanding of local markets. Over 170,000 employees are dedicated to providing fast and reliable services that exceed customers' expectations. Founded in San Francisco in 1969, DHL's international network links more than 220 countries and territories worldwide. For more information on DHL, please visit www.dhl.com.

DHL Press Contacts:

Candace Bouchard
Corporate Communications
DHL Danzas Air & Ocean
Communication Manager, North America
((954) 888-7114
email: USA.PressOffice@dhl.com