DHL Express plans to move its U.S. hub operations for its international business to the Cincinnati/Northern Kentucky International Airport (CVG) in Erlanger, KY. The shipper’s U.S. air cargo and package sorting are now based in the Airborne airport (ILN) in Wilmington, OH.
Ian Clough, chief operating officer for DHL Express U.S., said in an April 17 memo the U.S. Management Board of DHL Express and parent firm Deutsche Post DHL made the decision. The company spent months reviewing all available options, he said.
“This move will greatly enhance the operational effectiveness for our industry-leading service and significantly improve our hub and gateway operating cost structure,” Clough said. “It also presents a better strategic fit to handling the current U.S. volume levels.”
DHL, which last year decided to get out of the domestic U.S. parcel delivery market to focus only on international shipments, said it will handle the transition in phases. It plans to be fully operational at CVG by mid- to late summer. No announcement has been made as to which airline DHL will use as its air carrier at CVG.
In late March, the Business Courier (Cincinnati) reported that Kentucky had offered DHL nearly $2 million in tax incentives to relocate the company’s remaining operations out of Wilmington to CVG. Before DHL consolidated its primary U.S. hub operations at the expanded and upgraded Wilmington Air Park in fall 2005, it used CVG as its main sorting hub.
So will this move back to Cincinnati Airport work for DHL Express? Maybe—if the execution is flawless, says Gerard Hempstead, president of Hempstead Consulting and a former vice president for DHL. Any mishaps could be detrimental to DHL, which Hempstead says is something the courier should know from experience.
DHL had a lot of problems with its move from Cincinnati to Wilmington by DHL in September 2005, he says. “Shipments were late, delayed, damaged, and missing for weeks.” In fact, Hempstead believes that problems with that move marked the demise of DHL Express in the U.S.
But Hempstead thinks it makes sense for the courier to return to the Cincinnati hub. “It’s financially a good move for DHL, because Wilmington is designed for hundreds of flights a night and millions of packages, so it’s just too costly to maintain,” he says.