Bad news piling up for Wilmington
ABX Air finds out that ground freight operation is closing.
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Tuesday, November 11, 2008
DHL's cost-cutting measures at its Wilmington hub will close the ground freight operation there and the air cargo hub. Staff photo by Teesha McClamThe bad news for Wilmington is getting worse. ABX Air Inc., which operates the freight sorting and delivery hub there under contract to DHL, found out that DHL's expanded U.S. cost-cutting plans will mean closure of the ground freight operation there, as well as the air cargo hub.
"New in this announcement for ABX Air is DHL's closing their ground network," ABX Air president John Graber said Monday, Nov. 10.
That was an addition to DHL's May 28 announcement of U.S. cost-cutting plans, Graber said. ABX will lose its business managing ground freight at Wilmington and 15 other hubs across the country.
"We've been waiting for the other shoe to drop since the May 28 announcement, and I think it hit the ground today," said Randy Riley, a Clinton County commissioner.
The Wilmington hub — that region's largest employer — could be essentially out of business early in 2009 if DHL can negotiate a previously announced deal to hire out its U.S. cargo sorting and flying to United Parcel Service at Louisville, Ky. That would wipe out at least 8,200 jobs at the Wilmington hub, plus perhaps 2,000 more related jobs in the community, Ohio officials have said.
DHL accounts for 90 percent of ABX Air's revenue. ABX has about 7,000 employees worldwide, with the bulk in the Wilmington area. ABX provides maintenance and charter services to other customers.
Deutsche Post World Net, the German parent company of DHL, said Monday it will eliminate DHL package deliveries between U.S. cities after Jan. 30, 2009, to focus on only making cross-border deliveries between U.S. and foreign destinations. The worldwide economic downturn is forcing the reductions, Deutsche Post said.
That will slash DHL's daily package shipments in the United States from 1.2 million to about 100,000 daily, reduce DHL's U.S. employment from the current 13,000 to between 3,000 and 4,000, and cut the number of U.S. stations from 412 to 103.
It will slash the company's U.S. operating costs from $5.4 billion annually to less than $1 billion, with a loss of $1.3 billion projected for 2008.
If for some reason a deal with UPS can't be worked out, the down-sized DHL could fall back on its current freight-flying contractors at Wilmington, ABX and ASTAR Air Cargo, said John Mullen, DHL Express' chief executive officer.
Members of Congress from Ohio, who last month had argued that a DHL-UPS deal would violate U.S. antitrust laws intended to encourage market competition, focused instead Monday on urging the U.S. Department of Labor to approve a $3.8 million grant for Ohio for retraining DHL hub employees who lose their jobs.
Staff writer Jessica Wehrman contributed to this story. Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
