Subscribe to our free, weekly email newsletter!

DHL set to invest in improvements at its Cincinnati/Northern Kentucky Airport hub

By Jeff Berman, Group News Editor
February 09, 2011

Express delivery and logistics services provider DHL said today that it plans to spend $22.5 million to expand its hub facility at the Cincinnati/Northern Kentucky Airport to meet the growing needs of international shippers.

In March, DHL said it will begin building on 19 acres of land leased from the CVG Airport Authority to expand its existing aircraft apron and construct nine new aircraft gates. They added that this will enable parking for nine additional wide-body aircraft that will connect the U.S. to points in Asia, Europe, and the Americas.

DHL moved its U.S. hub operations to CVG in July 2009. DHL’s U.S. business focuses on international import and export offerings in major metropolitan areas. It ceased U.S. domestic-only air and ground services at the end of January 2009, due largely to the ongoing uphill battle it faced competing with industry giants UPS and FedEx for market share.

A DHL spokesman told LM that this expansion was driven by the successful realignment of its business to focus exclusively on international services and growth in its import and export business, leading to “a need to continue to adjust its operation to meet the growing demands of international shipping customers.” The spokesperson added the CVG expansion positions DHL’s largest facility in North America for continued growth in package volume.

Company officials said this $22.5 million investment is the second phase of a two-year, $40 million investment geared to improve hub operations, including equipment upgrades and facility improvements. Construction will run through September 2011.

This follows an October 2010 announcement by the company, when it heralded a $12.5 million initiative to upgrade existing hardware and software applications running its auto sort system and improving the speed and reliability of its shipment scanning and sorting. CVG handles about 90 percent of all U.S.-bound DHL volume.

Even though DHL is increasing throughout and capacity at CVG, the spokesman said that the company will not return to serving the domestic U.S market like it previously did.

“For the U.S. market, we are the ‘Specialists in International; and will continue to focus exclusively on providing import and export services for customers that need to be connected to the global marketplace,” explained the spokesman.

While DHL maintains it will not return to serving the U.S. domestic market, a noted parcel expert told LM that may not be the case forever.

“As more and more corporations will be demanding a global logistics supply chain, DHL can’t ignore the US market, the largest transportation market in the world and hold itself out as a global player,” said Jerry Hempstead, president of Hempstead Consulting. “It just makes it too easy for FedEx and UPS to leverage their strength here.”

Hempstead went on to say that he suspects DHL may be contemplating doing some domestic service on a limited basis, explaining it has excess capacity in its terminals and on their trucks to do so without adding cost and being able to layer on incremental revenue.

“The marketplace would welcome their return as the memory of their [U.S. domestic service exit] is now more than 2 years old, and FedEx and UPS have been showing no mercy with their pricing increases. The price point is far higher than when DHL exited and there is no difference if a piece is moving from New York to Paris France or to Paris Texas other than one has to pass through customs.”

For more articles on DHL, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

The average price per gallon for diesel gasoline increased 1.6 cents to $2.492 per gallon, according to data issued by the Department of Energy’s Energy Information Administration (EIA) this week.

Article Topics

News · Air Cargo · DHL · Logistics · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA