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May 29, 2008 |
UPS-DHL Deal Would Mean More Louisville Jobs
Deal would add jobs in Louisville
May 29, 2008
By Bill Wolfe, Courier-Journal
A planned deal for UPS to fly and sort packages in the United States for rival DHL would generate up to $1 billion more a year for UPS and result in more jobs for pilots and ground workers in Louisville, a company spokesman said yesterday. "The majority of our air volume comes through Louisville," home of the all-points UPS sorting hub, Worldport, "and this would be no different," UPS spokesman Ken Sternad said. Though it's not yet clear how many jobs might be generated, Sternad said, "There's no way we're going to handle the anticipated volume without adding to our capacity. And that means people." "The exact breakdown of volume that we get from them will determine how much of it comes through Louisville," he added, "but it's safe to say that a large portion of it, likely the majority of it, would." Louisville Mayor Jerry Abramson said the DHL-UPS agreement could provide "some real opportunities for Louisville."
The Worldport operation at Louisville International is UPS' main air hub, and the company, which did $50 billion in business last year, has its airline headquarters off North Hurstbourne Parkway. In all, UPS employs 20,560 in Louisville, including about 3,000 pilots and 9,339 hub workers. Under the proposed deal, DHL would continue to deliver packages once they reach the ground, while UPS would fly packages between cities, sorting them at Worldport or other hubs. UPS already was ramping up its air fleet, planning to take delivery of seven new aircraft this year and five more in 2009. UPS could add air capacity by delaying the retirement of older planes or leasing planes, Sternad said. No additional purchases are planned for now, he added. Louisville International would also see at least a few more flights from overseas, with shipments from abroad arriving in Louisville on DHL or DHL-contracted planes to be transferred to UPS' system.
If the deal goes through, it could be good "for us as a community and as an airport," said Skip Miller, executive director of the Louisville Regional Airport Authority. The agreement is expected to run for up to 10 years, and UPS would begin phasing in a limited amount of DHL business this year. UPS' archrival FedEx said in a statement it will "undoubtedly" win clients as DHL and UPS try to link their U.S. systems. DHL customers would see little change, said company spokesman Jonathan Baker. DHL currently hires other companies for air transportation and air-package sorting in the United States. "This is simply a replacement of those air operators with UPS as a carrier for us," he said. DHL is also closing or consolidating some service centers in sparsely populated areas of the country, Baker said, affecting less than 4 percent of ground volume. The company also plans to use the U.S. Postal Service to make the "final mile" delivery of 2.4 percent of ground packages, he said. For the air packages, there are technical issues expected in incorporating DHL packages into the highly automated UPS sorting system, Sternad said. Currently, the companies' systems are not compatible, but UPS is confident they can be blended, he said.
DHL invested $2.7 million last year in a new service center in Louisville, consolidating all local operations into a 64,000-square-foot operation on Crittenden Drive. Meanwhile, the UPS Worldport expansion, announced in 2006, is on schedule and on budget, UPS spokesman Mike Mangeot said. The first of two new wings will open next year and the second will open in 2010. In addition to any jobs added by the DHL deal, the hub expansion means about 5,000 more employees, about two-thirds of those in package handling, he said. "We will bring them on as needed," beginning in earnest next year and continuing through the expansion, Mangeot said.
Courier-Journal
UPS to Fly North American Air Express Packages for Rival DHL
May 28, 2008
Atlanta-based United Parcel Service Inc. has reached a tentative agreement with rival Deutsche Post World Net to provide air transportation of express, deferred and international packages within the United States for Deutsche Post's DHL unit. UPS (NYSE: UPS) also will fly all DHL packages between the United States, Canada and Mexico, UPS today said in a news release. The move is part of a broader restructuring of DHL's U.S. business, announced today in Bonn, Germany. A limited amount of DHL volume is expected to be integrated into the UPS system later this year, and will ramp up fully in 2009, UPS said in the release. The 10-year agreement, which is expected to be finalized later this year, might bring UPS an additional $1 billion a year in revenue. It also will increase the amount of volume that passes through Worldport, the company's largest international air hub, which is located at Louisville International Airport.
The $1 billion expansion of Worldport began in 2006. When completed, it will add 1.2 million square feet to Worldport's existing 4 million square feet. The project is expected to be complete by June 2010. UPS said in the release that it will be able to handle "much of the anticipated new volume" with its existing aircraft fleet, and will add capacity where needed. Louisville-based UPS Airlines will take delivery of seven new aircraft this year and another five in 2009. UPS currently has about 600 aircraft that serve more than 200 countries. In addition to Louisville, it has international air hubs in Cologne, Germany; Taipei, China; Miami; and Pampagna, Philippines. The company announced last week it would relocate its intra-Asia hub from Pampagna to Shenzen, China, in 2010.
Business First of Louisville
UPS: DHL Pact Worth $1B
May 28, 2008
The 10-year agreement between UPS and DHL in the United States will bring UPS some $1 billion in annual revenue over the life of the contract. The deal with Atlanta-based UPS was announced Wednesday by DHL parent Deutsche Post of Germany under a restructuring that will sharply pull back DHL’s asset-based operations in the United States. One of the main DHL competitors in the United States, UPS likened the deal to its transport agreement with the U.S. Postal Service, saying it will only carry DHL packages between cities and not be involved in pickup and delivery. “We believe this arrangement with DHL would represent a wise use of our assets and network capacity while creating a substantial and profitable revenue stream for our company,” said UPS Chief Operating Officer David Abney. The carrier said it has no contract yet for the business but expects to complete the pact with DHL later this year. The company said it will start carrying “a limited amount” of DHL volume this year and more starting in 2009.
-- Traffic World
Journal of Commerce
Taking the Next Step: Work-Force Initiative Strives to Identify a Regional Identity to Drive Economic Growth
May 23, 2008
Competition is the focus for a federally funded economic and work-force development initiative centered on 26 counties in Kentucky and Southern Indiana. Last June, Kentucky was one of 13 states to receive Workforce Innovation in Regional Economic Development grant funds from the U.S. Department of Labor. A $5 million grant to the Lincoln Trail Area Development District has helped launch Wired65, a local effort to bind the 26-county area as a singular economic region. Wired65 has commissioned Austin, Texas-based business and economic development consulting firm TIP Strategies Inc. to help develop the Wired65 Regional Competitiveness Strategy. The strategy will provide guidance on how to proceed with local work-force development efforts, such as attracting and retaining talented professionals, said Debbie Wesslund, who was hired last year to lead the Wired65 initiative. "Part of the goal is to help us understand how to work better as a region," she said.
Seminar discussed local challenges
About 70 people attended a May 8 seminar in Bardstown to discuss regionalism and its role in the global economy, Wesslund said. Elected officials, business leaders and higher-education representatives were among those who attended. A presentation during the seminar focused on competition as an economic driver that can transform smaller geographical areas into unified regions with similar objectives. Attendees also were asked to discuss challenges facing the region. The varied responses included such topics as defining a regional identity and culture, a need for increased communication between investors and entrepreneurs, and transportation challenges, such as rising fuel costs. But the day also served as a springboard for other facets of the local initiative.
Survey seeks perceptions of region
To solicit feedback on the region's strengths and weaknesses, a survey has been posted on the Wired65 Web site, www.wired65.org. The survey will remain on the site for the next two to three weeks and is being sent to professional groups across the region, Wesslund said. Information gathered from the survey will serve as the groundwork for the competitiveness strategy. This summer, TIP Strategies will begin work on a regional economic positioning analysis and a human capital analysis, Wesslund said. The consulting firm and individuals affiliated with Wired65 will meet with groups in each county to discuss that county's assets and difficulties. But, overall, Wesslund said, the discussions will focus on opportunities and not potential setbacks.
"I think people know we have some challenges," she said. "But we want to know what are we doing well, what are our opportunities, and get people to react to that."
Forming an identity
The strategy, Wesslund said, should help find a collective identity for the 26-county region. Some WIRED regions -- there are 39 nationwide -- have focused on characteristics specific to their geographical location.
A region in Maine, for example, has focused on the shipping industry, and a region in Montana hopes to capitalize on its abundance of grain for biofuel production. The Wired65 strategy is expected to be complete by October, Wesslund said. "We hope this process helps us understand what our regional identity is," she said, "and how to move together on that." Joe Reagan, president and CEO of Greater Louisville Inc., the metro chamber of commerce, said the Regional Competitiveness Strategy is an important step in outlining economic development goals for the region. GLI is a member of the steering committee for the Regional Competitiveness Strategy.
The strategy will build on the 1997 Visioning Report, Reagan said. That report was spawned by a 1996 assessment of the city's economic development opportunities by M. Ross Boyle, president of Vail, Colo.-based consulting firm Growth Strategies Organization Inc. The 1997 report identified goals to be achieved by 2010, Reagan said, so area leaders have reached a "natural point" to identify new goals and develop a strategy beyond the current decade. The previous report was focused largely on Louisville, but Reagan said the region as a whole competes with other areas to lure and retain new industry and a talented work force. The Regional Competitiveness Strategy, he said, provides an opportunity to identify and maximize the strengths of the 26-county region being examined by the Wired65 initiative. "This is a time to actually have everybody at the table and to say, 'OK, as a region, what do we need to do?' "
Promoting regionalism
Wired65 is a work-force development initiative funded by the U.S. Department of Labor and focusing on 26 counties in Kentucky and Southern Indiana.
Kentucky counties: Carroll, Trimble, Henry, Oldham, Shelby, Jefferson, Spencer, Bullitt, Nelson, Washington, Hardin, Meade, Breckinridge, Grayson, Larue, Marion, Green, Taylor, Adair
Indiana counties: Crawford, Harrison, Floyd, Clark, Washington, Scott, Jefferson
Business First of Louisville
Container Firm Moves Distribution Center to
Bluegrass Research and Industrial Park
May 23, 2008
Chalk up another one for United Parcel Service Inc. and its Worldport hub. Container & Packaging Supply Inc., an Eagle, Idaho-based wholesale distributor of containers and packaging materials, has moved its Richmond, Va., distribution center to Louisville, and a company official said the shipping giant's presence at Louisville International Airport is the reason. "Specifically, we like the proximity to UPS," said Jim McCauley, owner and founder of the Idaho company, which began local operations this week at Bluegrass Research and Industrial Park in Jeffersontown.
Container & Packaging Supply lost its lease for a 2-year-old distribution center in Richmond and began re-evaluating the best way to serve its customers east of the Mississippi River, McCauley said. The company is leasing about 28,000 square feet in a 60,000-square-foot warehouse building at 1904 Watterson Trail, according to John Hoagland, a local commercial real estate broker and principal with Hoagland Commercial Realtors. The building is owned by Louisville's Lichtefeld Properties LLC and was constructed in 2002. Hoagland Commercial Realtors represented Container & Packaging Supply in the lease arrangements.
The local distribution center will initially employ four people but is expected to grow "significantly," McCauley said.
The company supplies a variety of packaging materials, including bottles, buckets, cans and drums, to business customers, primarily manufacturers in the United States, Canada and Mexico. In addition to the UPS presence, company officials liked Louisville's central location, which is within 500 miles of half of the U.S. population, according to Greater Louisville Inc., the metro chamber of commerce. That's "a very attractive feature," McCauley said. Container & Packaging Supply was founded in 1970 and maintains its administrative offices and original distribution facility in Idaho. It has 38 employees companywide.
Business First of Louisville
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