Jun 2, 2015

DHL to expand Cincinnati hub again

View of the DHL's U.S. hub at the Northern Kentucky International Airport

DHL announced on May 27 that it would invest $180 million (approximately Y13.4 billion at Y124-to-the-dollar exchange rate) in the expansion of its U.S. hub that is located at the Northern Kentucky International Airport (CVG) in Cincinnati, U.S.A. The hub aims to address the growing international trade transactions in the U.S., starting with the Cross-Border E-Commerce (Cross-Border EC) market. With this investment, DHL aims to boost the efficiency of sorting cargoes and loading them into aircrafts by introducing new machines that will the increase the space in storage sheds and at the tarmacs for airplanes. The details of its investment plans are not immediately available. The Cincinnati hub began to assume the role of DHL's core international hub in the U.S. in 2009. Total investment in the hub now stands at $280 million, including the above newly decided investment amount.

Expansion works at the hub are slated to be completed in late 2016. Stephen Fenwick, CEO of DH Express Americas, claimed that, "This investment will further reinforce our activities in the U.S. market, as well as promote the hub's unifying role in connecting the world."

DHL's hubs in the U.S. are located in CVG and Miami, with the U.S. hub in CVG at the core. The company used to operate the CVG base as its U.S. hub for about 20 years, but it transferred the hub functions to Wilmington, Ohio in 2005. Thereafter, DHL moved the hub functions back to CVG in 2009 while it was reconstructing its express business in the U.S. It then withdrew from the express business in the domestic U.S. market and shifted to a system that focuses on international express services to/from the U.S.

DHL has three core international hubs in the world, comprising the ones in Leipzig, CVG and Hong Kong. CVG connects Asia, Europe and the U.S., and handles about 46 million pieces of cargoes per annum. Cargoes are transported to the entire U.S., Canada, Mexico and Latin America from CVG. Inside the U.S., DHL also connects the cargoes to its gateway facilities in New York and Los Angeles, as well as the hub in Miami.

The company has been announcing a string of investment plans worldwide in the past 18 months. It invested around $200 million into the expansion of its European central hub at the Leipzig/Halle Airport in a bid to double its scale. It has also invested $85 million toward the launch of DHL Express South Asia Hub in Singapore, which is slated to kick off operation in the first quarter of 2016. Meanwhile, it is advancing expansion programs in the Middle East and North Africa with an investment of $177 million.

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