Driven by the fast growth of international e-commerce shipments, transport and logistics firm DHL Express will spend $108 million to expand its U.S. airfreight hub at Cincinnati/Northern Kentucky International Airport, the company said Thursday.
The investment will allow Bonn-based DHL to keep up with the significant growth of business-to-consumer shipments triggered by the popularity of international online commerce, according to Verena Gross, the company's communications manager for the Americas.
DHL will add gates to accommodate additional aircraft; increase warehouse space at the airport; and install advanced equipment for package sortation and aircraft loading and unloading. The expansion is expected to be finished in 2016, the company said in a statement.
"The expansion and service enhancements from this investment will provide additional infrastructure and efficiency," said Stephen Fenwick, CEO, DHL Express Americas, in the statement. "This, in turn, will support the continued growth in international shipments that we're seeing, as well as add to the economic well-being of this region."
The Cincinnati/Northern Kentucky airport is one of three DHL worldwide hubs, along with Hong Kong and Leipzig, Germany. It processes 46 million international shipments annually, handling freight bound for the U.S., Canada, Mexico, and Latin America.
Many international e-commerce transactions that touch the U.S. occur in Australia, Canada, and other countries with free trade agreements, the company said. The company has forecast that this "distance selling market" for e-commerce will grow by 10.7 percent per year for the next five years.
A 2014 DHL survey showed that China, Japan, the United Kingdom, and Germany are the biggest distance-selling markets; the most popular product categories by sales were fashion, consumer electronics, media products, and food and beverage.
DHL withdrew from domestic U.S. transportation service in January 2009 after sustaining six years of multibillion dollar losses trying to compete with Memphis-based FedEx Corp., Atlanta-based UPS Inc., and to a lesser extent, the U.S. Postal Service. The U.S. became a node in DHL's international delivery network.