DHL, the Brussels, Belgium subsidiary of Bonn-based Deutsche Post World Net, plans to cease its U.S. domestic-only air and ground services at the airport on Jan. 30, 2009, the company reported Nov. 11.
The reason: DHL has been losing $5 million a day, competing against FedEx, UPS and the U.S. Postal Service, according to DHL CEO John Mullen."This is the right move for our U.S. Express operations, given the current economic climate and for the long run," Mullen tells Real Estate Channel.
"Focusing our U.S. Express efforts on what we do better than anyone else - international shipping - serves the best interests of our customers, employees and shareholders around the world."
Adds Frank Appel, CEO, Deutsch Post AG, "By taking a realistic view and defining clear actions towards reducing costs, I am confident we are now on the right track to secure the Group's long-term growth."
Carl Quesinberry, a Cincinnati, OH area-based economic development and commercial real estate consultant, tells Real Estate Channel, DHL "still remains a formidable competitor in international delivery and shipping offerings, and will maintain 103 stations within the U.S. to facilitate its international offerings after February 2009."
Carl Quesinberry
Quesinberry says DHL is in negotiations to transfer ownership of the AirPark to the Clinton County Ohio Port Authority. Preliminary redevelopment concepts for the property are being studied by a state, federal and local task force headed by Wilmington, OH mayor David Raizk.
"Wilmington AirPark presents a very interesting opportunity in that it is privately owned and as such, can offer fee-simple ownership to a company, whereas most often, only leasehold opportunities are available to companies as tenants of the real estate at airports because of FAA and other regulatory restrictions," Quesinberry says.
He suggests "the greatest probability of a successful redevelopment will require an assembly of a diverse group of professionals of different expertise that incorporate the interests and concerns of all stakeholders."
"Out-of-the-box thinking will be critical, given the current global and domestic economic climate," the consultant adds.He says federal, state and local agencies "have assembled to assist in this process. DHL Express and Deutsche Post World Net continue to demonstrate good corporate citizenship in their concern and efforts to assist in this process and transition."
The airport is DHL's largest single real estate asset in the U.S., the consultant says. DHL acquired the airport in April 1953 when it bought Seattle-based Airborne Express for $1.05 billion.
Wilmington, a city of 13,000 residents, is 46 miles northeast of Cincinnati. About 10,000 area jobs will be lost by the airport's closing, Quesinberry estimates. The AirPark itself has a staff of 6,000. DHL employs 170,000 workers in 28 countries.
United Parcel Service is expected to handle DHL's domestic business under a tentative 10-year contract signed last May, Quesinberry says.
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