You know who Microsoft hates? No, not Apple. It really hates DHL. Apparently, the delivery service has hit the folks in Redmond where it hurts: in the Xbox. It seems that 21,600 consoles were totally messed over by "impact damage, wetting, pilfering and shortage" when one of the company's freight trains derailed en route to Long Beach, California. The big M claims that DHL refuses to compensate for the lost goods, and has filed a complaint at a US District Court in Seattle, calling for $2 million in damages and stating that the shipper "negligently breached its duties as a common carrier, handler, bailee, warehouseman, agent, or in other capabilities." Harsh words, but really, who's to blame for this mess? Next time we suggest going with G.O.D.
[Thanks, Andrew S.]
posted Oct 11th 2008 11:32AM
Finally, God exists.
DHL never pays for damaged shipments even if they were insured with them.
We no longer use them after similar incidents.
Yes, but this is Microsoft. I predict that DHL will find any instances of Windows in use mysteriously "de-activated"...
I'm sure microsoft has made DHL plenty of money, much much more than $2 million, to ship all the consoles. It's not like DHL is really losing money.
Forget the iPhone for a second... I personally know that DHL is the crappiest shipper on the planet... you have a batter change getting your goods delivered to you in better condition if it was launched from a Medieval Catapult !
DHL needs to DIE!!!!! seriously this company needs to be run to the ground, and I don't care who loses jobs over this....
@ iEye
Sadly, I have to agree. I do online shopping and it seems whenever I go with DHL my packages aways show up damaged to the point where even the inside packaging is damaged.
No way is this worth $2million.
1/ well over half the Xboxes were likely already faulty anyway before it derailed.
2/ the other 10,000 are worth what $10 each?
No way is this worth $2million.
1/ well over half the Xboxes were likely already faulty anyway before it derailed.
2/ the other 10,000 are worth what $10 each?
When I bought my computer I also bought a 32" LCD HD Screen with it. The screen actually went from Ontario to TENESEE! Then up here to Washington. But thats not the worst part, It got here with a hole in the screen too...It took 2 weeks to get shipped back to friggin Ontario. Then I couldn't get a new one, because the model had been discontinued. SO, here I am with a 32" Vizio. Horray for COSTCO!
I had similar with Fedex (Damage items). Sadly I'm very unlucky while people like Fedex.
I hope Microsoft wins.
I hate the american counterpart of DHL (formerly Airborne Express).
They owe me $55.
"8 Dead in Train Derailment, 21,600 Xbox 360s also perished."
How can there be a god if you are still around?
Delivered Here Late
@Jonah: I've had worse from UPS. I had a package shipped from New Jersey go to Georgia, Massachusetts, Texas, Ohio, and Maryland before finally being delivered to me in Virginia.
I've only had a handful of experiences with DHL and they were OK. In fact, at one point, UPS and FedEx drivers were slacking off and dropping off packages at the apt leasing office without attempting to deliver to my apt (I was home) or leaving notice that they had been "delivered". I was told by the leasing office that one driver actually got fired because he was forging delivery signatures when he dropped off the packages without seeing anyone at the office. DHL's drivers would still come to my apt to deliver their packages.
Why for crying out loud, iEye, do you have to bring iPhone into everything? And it's really not nice of you to think bad about hard working men and women. If a company, DHL or any other, is doing bad or providing bad service then it's usually the fault of upper management for bad planning and strategy. Guys who go on $6000 a pop saunas. It's sad that that hard working people have to loose job for their bad decisions.
Loosing a job is not a nice experience, you pr^&k. But then again, I am gussing, you never had one.
Dudes, you might want to check out ParcelfArce here in the UK, talk about rip-off service.
I refuse to use DHL for anything. ANYTHING. Those guys were responsible for shipping us mail when I was in Iraq. We went 2 months with no mail because DHL refused to ship it unless their pilots salary was more than the $150,000 the millitary was paying them. 2 months without mail in Iraq is a long time. And us soldiers on the ground in actual harms way were only getting 1400 a month.
This is whats wrong with the train industry as a whole. The Union Pacific will let refrigerated cars full of food run out of fuel and spoil, and doesn't compensate the companies for the loss. Quasi-governmental entities for you.
I sent an item worth £300. ($550?) with DHL earlier this year. It arrived in a box "repackaged by DHL" and inside was my parcel in two pieces.
They never paid me for any damages.
Umm... I think they have a fair point?
And since when is a trail derailment an act of God?
Thats not what I meant...
http://www.youtube.com/watch?v=-Gu3gDhESRY
dang engadget comments.
the song is nightrain btw
It's DHL's fault the train was derailed?
Is it Microsoft's fault then?
No, it's their fault for not insuring against train derailments (highly unlikely) and not paying Microsoft back for destroyed/damaged/lost product.
it's DHL's fault for not paying the insurance.
DHL once lost (stolen is the right word) our twenty 42'' touchscreens, designed specially for a museum by us. thanks to "our" insurance company we got our money back for the hardware, but this cost us 2 months of development and a big client. DHL never accepted to pay for the loses.
I totally understand why Microsoft is mad...
Good point. I hadn't considered those. Anyway, I've never had any good experiences with DHL, and refuse to go with them again.
And yes, it is DHL's fault, it was one of their trains. I hope this 2 mil is enough to put DHL out of business. I hate that company.
@Ellianth, DHL's parents company has well over $10 Billion USD revenue per year...$2 million is a drop in the bucket and won't effect them at all.
Well, if my parents had to pay 2 million for one of my mistakes, they'd disown me. Let's hope it works the same way in the corporate world :P.
DHL was the shipper which means that they are 100% responsible for what happens to the package while on-route . . . . as long as Microsoft paid for insurance which I can't imagine them not.
There is one small loop hole which is, if DHL was able to get the consignee to receive the damaged goods without indicating damage. If that happened, DHL is 100% off the hook as there would be no genuine proof that the damage happened while in the hands of DHL.
It sounds a bit insane, but that is how it works in the shipping industry.
Actually they had 97 Billion USD in revenue in fiscal year 2007
**** DHL!!!
**** the RIAA!!!
**** the MPAA!!!
**** EA!!!
**** COMCAST!!!
etc.
DHL is active in almost all countries in the world too, sometimes using smaller companies that they bought, but there's DHL trucks all over the planet.
And seeing so many people have issues with so many delivery companies perhaps there should be something done by the lawmakers, a limit on the number of complaints before you are forced to pay a fine or shut down a month or something, I don't know what exactly, but something to force them to get their act together, there are other services where the government had to use force to get them to get their act together and it did work for a large part eventually
Sad really that it's needed, and weird that the marketforces aren't working in pushing bad practises out.
At least they're only suing for what they lost and not a rediculous amount more.
$21,600 360s do not amount to $2 million. Would love to know how they arrived at that number. I guess they figuring the difference is what would be earned from game sales that result from the console sale. Or maybe it comes from the peripherals they didn't include.
Jupiter: what kind of calculator are you using? At cost price of around $90 x 21,600 = $1,944,000.
nvm,
I fail @ math.
@jupiterthunder
it's 21,600 consoles, not $21,600 worth of consoles you moron. at $200 a console, that's $4,320,000 meaning that ms is suing for half of what the consoles cost.
I figured that out. Then downvoted myself accordingly.
By the way jackass, that dollar sign was a mistake. It was the math part that was all butchered.
Michael, Jupiter's math is correct if it costs MS $90 to make each console. Your math is correct if it costs MS to make each console. The price on retail shelves is $200, but that's not the cost it takes for MS to make the system. Jupiter is assuming MS is suing for that much because the consoles cost around that much to produce.Which would make sense to only sue for $2mil
$90 cost? ...what? Hasn't it been pretty well established that Microsoft loses a significant amount of money when they sell 360s at retail?
You all dumbasses lol.. MS is charging DHL for the retail value of the xbox not the cost for MS... Microsoft should charge more for the delay of the product. I would ask for the money that I lost on saling my items..
Did Microsoft just accidentally tell everyone that the units only cost them about $92 each?
Maybe that's the actual cost of the consoles O.o
Wait. Doh. That's what you were saying anyway...
I fail at comprehension.
$92.592592592 to be exact
That does seem kinda odd, I thought they were selling them at a loss?
If DHL doesn't cover the losses, the 360's price will probably jump over that nice 50% markup.
Microsoft's way of exploiting the weak
It costs MS more than $92 each...however, they said that is the number of consoles in the shipment, they didn't say that ALL of them were damaged. Perhaps only half of them or a third of them were actually damaged and the others were spared.
Nah. That was when they were built for the first year or so. Now they're making a profit I think
Either way the games and live are profitable.
That may have been raw manufacturing cost. Since there are plenty of other costs associated with bringing a product to market, most notably warranty cost which we all know Microsoft is well aware of. Since they are only out the manufacturing, packaging, and shipping costs they probably have a pretty good case with the 2mil lose they are suing for. Also nice to see for once somebody isn't suing for ridiculous punitive damages since I'm sure MS could make a good case for the other loses of revenue they are not receiving by having 21,600 less consoles in consumers hands.
kal326: The units likely cost much more than $92 to built. The GPU and CPU alone probably cost that, at least.
They were likely able to salvage most of the components. But that takes manpower, and they probably had to replace cases/etc.
@schmitty338
"...21,600 consoles were totally messed over..."
As for the "It seems" part, Engadget has been using that kind of stuff to fluff up their articles for a long time. There ya go: 21,600 dead 360s.
Maybe they finally took a hint from Nintendo and Apple and tried to start making a profit, since that would do well with stock owners, but forgot to tell people so they still think they are actually ripping off Microsoft buying hardware for cheaper than it costs.
Microsoft, you are naughty!
just because the consoles _now_ cost $92, does not mean the original ones coat that much, and that is just replacement cost on the manufactured units. I thought that MS was now profitable, if only barely, on the units.
Here comes the failtrain?
ALL ABOARD! (crazy train style)
Well since the 360 is a P.O.S. is it even worth it. 95% of those consoles probably would have been DOA from the RROD
WTF ARGF, TTFH FFS GHJYLLYLYLYLYLYYL, GHWRRDDD LDJHAL APJAJ A DSKNDSKDS (AJAKKD HGHG D D SS, GHHGHGH). HDHDHDH GHG E. HJ, OG IUJ.
Acronyms are fun and all, but not ones you made up yourself.
@fanman
Not defending the troll or anything but he didn't make up the acronyms
Wetting. DHL staff must of pissed on them because that all there good for.
I think we shoudl blame Sony or Nintendo... SABOTAGE!
Oh my god, its a mirage.
Sorry to be all boring but it all depends on the incoterms as to who bears the risks.
See: http://www.iccwbo.org/incoterms/id3040/index.html
Either Microsoft or DHL hasn't understood the "small-print" on the contract they have (although I suppose that's at the root of most lawsuits, so nothing new there).
should i recognize this screenshot?
I told them teleport was a safer option, but they wouldn't listen.
If you read the PCWorld article, it says they were on a train from McAllen, Texas to California, to then be shipped to Flextronics in Hong Kong.
I'm 99% sure these were already broken consoles, since when your console is sent in to repair that's where it's shipped, and the new one is shipped to you from.
That also explains why Microsoft wants $90 per console.
I don't even want to guess what the shipping costs are per console. What a gross misuse of resources. I'm only a couple hours from the Redmond campus, just a short jaunt up the rails from California, and I certainly wouldn't mind getting paid to fix some of those consoles. Stop outsourcing, Micr$oft.
BigD145, you do realize Microsoft isn't the one who actually builds the console, right? They don't personally own the equipment and the cost of contracting and building a facility to do so would mean the Xbox 360 would never be profitable. Most objects like these are always made by a major Asian contractor of some sort such as Foxconn or the like. So... take a lower wage and then maybe they can "stop outsourcing" and justify wasting billions to satisfy you.
If that's the case, Microsoft will have some angry customers when they receive their "fixed" consoles with entirely new HDDs. It would also cost MS the same as if they were not broken, since they'd have to be replaced with new consoles.
Though I guess if they were broken consoles MS would have already received the money from selling the consoles in the first place, so that would help offset the cost.
I know what many Microsoft employees make. I can and do live on less.
On the topic of outsourcing to Foxconn and the like; that's exactly what got MS in trouble over the RRoD issues. They skimped on quality and "got what they paid for." They lost over a billion dollars on that. A billion dollars that could have been put to use on a factory and a "Made in the USA" stamp on every Xbox. They could have gained customer support, but instead they lost some.
Here in my town we have a big Flextronics plant, so that means they had just crossed the border. That means they were new.
They took err jerb!
DHL delivered my Canon XTI from Dell by throwing it over my second story balcony. This does not surprise me.
DHL sucks, shipped a $1,500.00 clock with them had it fully insured, somehow in shipping a metal pole went through the middle of the package completely destroying the clock, filed a claim with them said they would send a rep to look at the clock, never showed but somehow their reporting says no damage could be seen, really? you didnt see the 3 ft pole sticking out of the box?
2 Million in damages? Simple math has this costing over 6 million.
21600*300(average cost of a 360)=6480000
The price an individual console sells for at retail is not the same as the cost of manufacturing each console. Economies of scale and what-not.
@Esat Dedezade,
That is true, but in the time it takes for Microsoft to send a new shipment (during the down-time), Microsoft may have been able to sell $6 million in consoles, so technically this would be a $6 million net loss for Microsoft as a result of this
Read the PCWorld article. They were already broken consoles getting shipped back to Hong Kong to get refurbished.
I hate DHL because when Microsoft first had people ship back consoles that got the RROD (I'm talking like right when they came out) they used DHL to ship the consoles. Not only that, but they had you pack in all of your accessories too so you were shipping back everything. On the return trip someone from DHL stole my Xbox, and it took two months and a very angry call to Microsoft to get them to send a new console, this time via UPS. Since then every time I had to ship back my Xbox it has been through UPS so I'm sure the thefts were not an uncommon occurrence. The worst part though is that when they shipped me a new console they didn't ship back any accessories so we had to yell at them again to get all that I sent back, and even now I still never got back the headset, ethernet cable, and the mini remote that came with the first batch of consoles.
I'll send you an ethernet cable.
Really? The super long one that came with the 360 originally? I could really use one of those, if you're serious email me at brokenmonkey89@gmail.com
Doesn't Microsoft (and pretty much everyone else) specifically tell you not to include all the extra stuff? They usually don't even want the power cord.
Yes, they do now. In the beginning they required that you send everything back. My guess is that they changed their policy when they switched to UPS, since people will be less likely to steal just the console without any accessories.
It won't let me post the comment I want, will it let me post this one?
Never mind, it finally came up.
@Jagster:
remember to send it using DHL services!
I've never had one single good experience with DHL. I have no idea why people use them. They aren't cheap either.
Rail Road Of Death!
Lol...
People all over the world, join hands...
So Microsoft is suing DHL for negligence?
File under: pot calling kettle black.
A Train derailment is not an Act of God. It's very often an act of negligence and as a contract carrier they are responsible for the care and safety of the goods while after they take possession of the goods and before delivery.