There can be no doubt about it now: DHL is readying to take on the giants. As part of an aggressive push into the U.S. market, DHL is investing $1.2 billion in its North American operations. The cash influx, which comes on the heels of last year's acquisition of Airborne Express, is aimed directly at increasing capacity and improving service so DHL can challenge domestic overnight service leaders FedEx Express and UPS.

The new funds will allow DHL to add seven new regional sort centers that will increase ground delivery capacity by 60 percent. Another five regional sort centers will be added to the network after 2005, bringing the total network to 24. DHL says the investment also includes spending to upgrade existing facilities and information technology infrastructure.

DHL, which has operations in 220 counties, is owned by Deutsche Post World Net, a major mail, express, logistics, and finance company based in Germany.