DHL is not entering the U.S. market lightly. From sponsoring the United States Olympic team to launching a full-scale advertising blitz on American television, the logistics giant is putting out the word that it is a viable third alternative to FedEx and UPS in the world's largest express market. Perhaps most significantly, DHL is investing $1.2 billion to consolidate its two air hubs to one site, add seven new regional sort centers across the country and generally upgrade North American facilities.
Consolidating its air operations from Cincinnati/Northern Kentucky International Airport to a primary facility in Wilmington, Ohio was a necessary investment that DHL says will allow it to operate more hours with greater efficiency. DHL owns the airport in Wilmington, which is 50 miles from Cincinnati, having inherited it as part of last year's Airborne Express acquisition.
And with trucking becoming an ever bigger component of the U.S. expedited freight market, the new DHL sort centers will increase the company's U.S. ground delivery capacity by 60 percent. "For anyone in the industry, it's clear that ground-based operations are part of the service express companies are now expected to provide," said DHL spokesman Jonathan Baker. "The difference between air and ground service has minimized considerably in recent years."
DHL Americas Chief Executive Officer John Fellows said the investment marks an "historic turn" that clearly announces DHL's intention to compete head-on in the United States with incumbents FedEx and UPS. The $1.2 billion upgrade will "fully integrate our network operations and solidify DHL as a competitive force in the U.S. marketplace," said Fellows.
The German-owned operator says it now has a 6-8 percent share, as meas ...