DHL's Relocation Makes Kentucky Overnight Sensation
Kentucky’s numerous transportation infrastructure advantages make it a natural for distribution operations.
Located in the center of eastern United States industrial and consumer markets, Kentucky is within a day’s truck drive of 60 percent of the nation’s population, personal income and manufacturing output.
Five interstates, several key U.S. routes and a network of limited-access state parkways serve the state. Kentucky’s intermodal transportation systems, including rail and riverway barges, provide efficient and cost-effective ways to move goods and receive materials.
Already home to UPS’ mammoth World Port logistics and distribution hub in Louisville, a key in attraction for logistics-dependent businesses, Kentucky scored another major coup in August 2009, bringing DHL Express back to Cincinnati/Northern Kentucky International Airport (CVG).
Executives with the international package movement company say Cincinnati/Northern Kentucky International is ideal for a distribution headquarters because of the close proximity to Interstates 71 and 75, making it easy for DHL trucks to access the airport. DHL Express spent $50 million on the operations center, and in 2010 is scheduling more than 65 flights per day to and from the airport hub with a fleet of Boeing 767s and B747-400s and McDonnell Douglas DC-8-73s.
The center employs 1,600 DHL staffers who are sorters, engineers, flight operators and compliance personnel. The huge DHL hub and gateway at CVG has 15 miles of conveyor belts, with thousands of letters and packages sorted every night.
“The U.S. is an important part of DHL’s overall Express network, and the hub in Cincinnati helps us connect our customers to over 220 countries and territories worldwide,” says Robert Mintz, DHL Express public relations manager. “Our new state-of-the-art fully automated facility is within a five-hour flight time between major trade lanes and is ideal for serving shippers that need to be connected to the global marketplace.”
Besides DHL, thousands of other companies have specifically chosen to base all or part of their operations in Kentucky, thanks in large part to the state’s efficient transportation network.
Kentucky’s central location and logistical assets appealed to Chegg.com, which in February 2010 selected a 611,000-square-foot facility in Shepherdsville, Bullitt County, as the site for a warehousing and distribution operation.
Chegg, the nation’s leading online college textbook rental company, will invest $27.3 million in the project and create 109 full-time jobs and up to 1,200 part-time seasonal jobs. The Kentucky Economic Development Finance Authority preliminarily approved Chegg for up to $1.5 million in tax benefits through the Kentucky Business Investment program.
“Everyone at Chegg is thrilled to be expanding operations and bringing additional jobs to Bullitt County,” says Aayush Phumbhra, co-founder and senior vice president of operations at Chegg. “Kentucky, and Shepherdsville in particular, makes a great home for Chegg’s textbook fulfillment center.”
Top transportation companies and organizations are taking notice of the state’s distribution advantages, including Chicago Consulting, whose business it is to recommend relocation cities and counties for manufacturers, distributors and retailers. In 2009, Chicago Consulting named Henderson County in northwest Kentucky as the best place in the nation to have a warehouse distribution center.
“Logistics and transportation are key reasons why we are ideal for a distribution company to establish a facility,” says Kevin Sheilley, president of Northwest Kentucky Forward, an economic development group that represents the counties of Henderson, McLean, Union and Webster. “In addition, as more of the central U.S population continues moving to the midwest and the south, Kentucky becomes even more strategic for distribution companies.”
Sheilley adds that northwest Kentucky is especially perfect for transportation companies because it is located on the new I-69 corridor and the CSX main north-south line runs through the middle of the region.
“Also, the Henderson river port is one of the busiest on the central U.S. inland river system, with a lot of heavy tonnage going through,” he says. “Yes, good transportation is a vital asset for us in northwest Kentucky.”
“Logistics and transportation are key reasons why we are ideal for a distribution company to establish a headquarters.”
