In a move that has shocked the aviation community, the German owned freight company DHL has decided to cancel its contract with ABX Air next year and give that business to UPS instead. The deal, seen as a cost-cutting effort by DHL, is expected to bring nearly $10 billion to UPS through a new cargo carrying contract. But it's not all good news.
The hardest hit by this deal is by far the community of Wilmington, OH, the former home of Airborne Express and current home of ABX Air and the Airborne Air Park, which is the largest employer in Clinton County. In 2003 when DHL purchased the sales and ground support network of Airborne Express, there was a great deal of concern in Wilmington. The air arm of Airborne Express subsequently spun off into it's own corporation, ABX Air. Fortunately for Wilmington at the time, DHL retained ABX Air's services through a contract to carry a majority of their air freight in the US with their fleet of 113 aircraft. This also meant the sorters and other employees at the Airborne Air Park could keep their jobs at the time. Next year, though, that contract will end and the tiny town of only 11,000 could face an economic disaster with some estimating 6,000 jobs lost.
What a blow to the gut. No offense to UPS on this, but this is a tough one to swallow.
Home to PointNiner
Friday, May 30, 2008
DHL sticks it right in the back of ABX and Wilmington, OH
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3 comments:
ABXA is not the only taking a hit here. AStar Air cargo will cease to exist when the change over to UPS is complete. This is a shame because AStar was/is the original DHLAirways airline until the germans came in and bought DHL and had spin off the the airline to satisfy foreign ownership rules.
A-Star used to be DHL so they deserve it more then ABX. They are the reason for the whole missfit organization. They should have been removed from service 5 years ago with the gas hog aging non profitable airplanes. The only reason they were used was because of there involvement in DHL pre merger.
I believe ABX has gas hog aircraft also. All of the DC-9s have the same engines as the 727 and the 727 carries twice as much. ATSG also leverage itself to prevent a buyout from Astar by purchasing companies that have the same type of gas hogs Astar has. That is the whole problem is ABX not being able to change a corporate attitude and not wanting to change its ways. If you want someone to blame call Joe Hete. He was trying to do what was best for shareholders, but instead refused to sell to minority owed Astar and it will result in bankruptcy for ATSG and the town of Wilmington.
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