Air Freight Rate Increase

Issue 034, October 5, 2007

During the past few months the major carriers servicing Australia have imposed a general market rate increase of $0.10/kg and $0.15/kg. This is the second pricing increase in less than a year to this market.  DHL Global Forwarding absorbed the prior increase without passing it onto our customers. Unfortunately, we can not absorb the second airline increase.

Even with this difficult market environment, DHL Global Forwarding has mitigated the capacity shortages by proactively increasing its allocations and securing an additional long term Blocked Space agreement with a major carrier servicing this market. In signing this agreement we not only increased out ability to mitigate the capacity reductions, we also prevent another increase for at least a six month period.

In view of the fact that the airline increases are complicated and each airline uses a different rating methodology, it is our intent to pass on a flat general increase to our existing valued customers.  Therefore, with effect November 1st, 2007 we are forced to impose a rate increase from the USA to Australia of $0.10/kg.

If you require additional information or clarification, please contact your local DHL Global Forwarding representative. Your continued support and understanding regarding this situation is very much appreciated.

Sincerely,

Brian Lindholm
Executive Vice President and Country Head - USA