All will be moved to ILN
by 2006. No plans from DHL about what A/C to keep or not as Air lift in the US are provided by two independant companies. Astar Cargo and ABX
More info below.
INTEGRATION BULLETIN #23
To: All Employees
From: John Fellows
Date: June 25, 2004
Subject: Expansion of Ground Network and Consolidation of Air Operations
Today is an important day at DHL as we make major announcements that will further strengthen our position in the U.S. domestic market, and provide future growth opportunities and a more competitive infrastructure.
First, DHL is pleased to announce a growing ground network through the addition of seven new regional sort centers. This planned expansion represents a key step toward building the most efficient and competitive infrastructure to support our goal of providing U.S. customers with a strong alternative choice in the express delivery and ground parcel market. This expansion will allow DHL to cover a larger geography with more competitive transit times and improved service levels, and will offer greater connectivity within our pickup and delivery network, supporting both air and ground services. The new regional sort centers should be completed by the end of this year and will be located throughout the country in areas to be announced.
In addition to expanding DHL’s geographic coverage and improving capacity by 60 percent, the new centers will offer greater connectivity within our pickup and delivery network, supporting both air and ground services. Beyond 2005, we plan to add five more centers and synchronize all 24 facilities with operations in Canada and Mexico to fully enhance the North American network.
Second, in order to best reap the benefits of combining our network with that of the legacy Airborne operation, DHL will consolidate air and hub operations of the CVG
facility in Erlanger, Kentucky to the legacy Airborne ILN
facility in Wilmington, Ohio. After an extensive analysis of available options, including an ongoing dual hub operation, the Company has concluded that a consolidation of operations into a principal air and sort facility in Wilmington, OH
would provide the optimal operational solution for DHL and our customers. We will continue to maintain administrative functions for our air hub operations at the CVG
hub, which will also remain as a backup air hub and sort facility for the foreseeable future.
In its current state, the ILN
facility can process seven times the pieces and three times the weight of CVG
’s capacity. Also, the airfield used by the ILN
facility is owned by DHL and shares the same geographical advantages that DHL’s CVG
The plans for consolidation at ILN
considered DHL’s needs for the next 20-30 years. To support these needs, we will further upgrade the existing ILN
facility to enhance letter and package sort capacity and add ramp space.
Please note that the transition of operations is a gradual process and we expect to begin primarily operating from the Wilmington facility in the Fall of 2005. We will keep you updated on the progress of the transition throughout this process.
The team at CVG
has played an important role in supporting the business this past year. From transition operations to the new CVG
facility to managing day-to-day operations during integration, they have played an important role to our post merger success. Their support during this transition will be an essential component as we continue to strengthen DHL’s network capabilities.
Should you or your teams have any questions regarding this announcement, we encourage you to submit these via the XXXX.Business@dhl.com e-mail account or to the Employee Hotline at 1-800-xxx-xxxx. We will compile an FAQ for distribution in the coming days.
This is an historic turn for DHL and the express and ground parcel delivery market. We thank you for your enduring support as we achieve our vision of becoming a stronger and more competitive player in the U.S. market, and the clear leader in the global transportation and logistics industry.
Hub Consolidation/Network Expansion Announcement: Employee Frequently Asked Questions
Q: What is the timeframe for the plan to consolidate air hub operations at the Wilmington Air Park?
A:In the Fall of 2005, we expect to begin operating primarily from the Wilmington facility. In preparation for this, we will begin the gradual operations consolidation process over the next several months. Plans are in place to expand the Wilmington Air Park and build out a semi-automated facility over the next 18 months, without compromise to the current hub operations.
This is not an overnight process, and the transition is planned to continue through 2005. DHL will continue to maintain administrative functions for its air hub operations out of its facilities at the Cincinnati/Northern Kentucky International Airport, and the facility will remain as a backup for airline sort hub operations for the foreseeable future.
Q: What functions will remain at the CVG
A: Currently, our plans are to continue providing gateway customs brokerage functions out of the CVG
facility.In addition, Network Transportation Planning, Network Capacity Utilization, IT
, Accounting, Hub Support Services, and other management functions located inside the administration building will remain.
Q: What are the plans to provide a backup sort facility at CVG
A: As part of the overall network contingency planning, the CVG
facility will remain on standby to provide all of the air hub functions needed should there be any need to support the Wilmington facility. This would include the temporary relocation of aircraft, as well as sort, ramp, maintenance and other personnel from Wilmington to Cincinnati. Equipment will remain on site for the backup facility, and the sort system will be operated weekly to ensure it is properly prepared to accept volume if needed.
be able to handle the combined volumes of a growing business?
A: With the transition occurring in the fall of 2005, ample time will allow for development of an expanded facility in Wilmington to accommodate the combined volumes, and to provide the infrastructure for future growth.
Q: What are the benefits of the air consolidation? A: One integrated network will give the new DHL the opportunity to become a truly competitive force in the U.S. marketplace. The consolidation, facilitating earlier arrivals and later departures of aircraft, will benefit customers, providing increased flexibility and enhanced service levels in many markets.
Consolidation to one air hub also offers significant cost improvements through efficiency in air routes, and removal of redundant assets. This will be a seamless process for customers, as the consolidation of our air hubs to Wilmington involves backend processes and airline configuration plans unnoticeable to customers.
Q: What are the benefits of DHL’s regional sort center expansion?
A: Our customers have already benefited by integrating the DHL and Airborne ground networks into one unified network. Network engineering enhancements through this integration have dramatically improved transit times for customers in many areas of the country.
With this build out, DHL will expand its geographic coverage, providing more competitive transit times, and improved service levels. We will have a more robust network and a blueprint to grow, along with our customers as we increase market share in the U.S.
The 7 additional regional sort centers will increase DHL’s ground delivery product capacity by 60%, meeting the expected requirements of our customers.
Q: Why are we embarking now on our network integration and expansion plans?
A: The promise of the new DHL is to bring intensified competition and improved service to a broader range of customers. Since the merger last August, we have been diligently working to integrate the legacy DHL and Airborne networks, completing several phases including line-haul, service center, and pickup and delivery integration. This promise will be realized through the completion of these U.S. network integration and expansion plans.
Q: How well does DHL service now compare to FedEx and UPS?
A: DHL is extremely competitive with FedEx and UPS, meeting and in many cases exceeding industry standards for quality of service. The network enhancements will put DHL in an even better competitive position, while giving DHL the increased capacity for future growth.
Q: Due to the air consolidation, will DHL air operations be affected elsewhere?
A: Many markets will benefit by receiving earlier morning arrivals and/or later departures in the evening. There will be no reduction in the number of cities served by DHL’s North American air network.
Q: The CVG
hub in Cincinnati has some very advanced automated sort and track systems. Will these systems be brought over to Wilmington? What changes will be made to the Wilmington sort?
A: The autosort system in CVG
will remain intact for back up purposes. The upgraded, expanded facility in Wilmington will have a higher throughput for its automated letter and small package sort than CVG
with a capacity of 910K pieces. Larger packages will move through material handling equipment supported by sort staff.
Some aircraft handling equipment will be relocated to ILN
, however, the necessary equipment will remain in CVG
for back up operations.
Q: How many jobs will be lost in the CVG
area due to the transfer of sort operations to Wilmington?
A: We do not expect a significant number of involuntary severances of DHL employees given natural rates of attrition in our sort workforce. In fact, our focus will be on the retention of needed workforce through the Fall of 2005. All impacted employees who stay with DHL until the Fall 2005 transition are being offered performance and retention packages.
While up to 800 part time DHL positions may be reduced in the area by Fall 2005. We do NOT expect 800 persons to be involuntarily separated from the Company.
Q: What will be DHL’s future presence in the Cincinnati area?
A: DHL plans to remain a strong member of the greater Tri-County business community and to expand corporate initiatives in the greater Cincinnati area. Cincinnati continues to be a market of special interest to DHL given our long ties to the community, the strong relationships we have built in the area, and the continued expansion of our service in the area. We are actively exploring additional opportunities to expand our local corporate presence. This includes advertising and sponsorship initiatives and our ties to charitable organizations.
In addition to the reduced-use CVG
air hub facility, DHL will continue to have significant pickup and delivery operations serving the Greater Cincinnati area. These service centers are located in Sharonville, Oh., Cincinnati, Oh and Erlanger, Ky.
Q: What is the Company doing to ensure service will not be impacted?
A: DHL is fully committed to ensuring that any adjustments made to its network are absolutely seamless. No customer will feel negative impact from the air consolidation, or through routing of shipments to new regional sort centers. In fact, DHL will continue to improve service through the air consolidation and expansion and enhancements to its network.