All bets off between UPS and DHL

US$1 billion airlift agreement dropped; DHL relocates to Kentucky.
DHL has now effectively exited the US domestic express scene.
DHL has now effectively exited the US domestic express scene.

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Express giants DHL and UPS have failed to reach an agreement over plans for the latter to carry DHL's US domestic airfreight.

Wrangling over the deal, which was estimated to have been worth around US$1 billion, had begun after DHL closed down its main hub in Wilmington, Ohio, with the loss of around 9500 jobs, according to the Reuters news agency. The breakdown in talks effectively brings an end to DHL's foray into the highly competitive US domestic market, and leaves it to concentrate in international express. 

The closure of the hub at Wilmington was something of a public relations disaster, with the announcement coming in the middle of the US presidential election - leading both candidates to criticise DHL over the job losses. However, falling airfreight volumes within the US effectively put an end to any hopes that DHL could find a deal with UPS to service its domestic products.

DHL will now return to the Cincinnati/Northern Kentucky International Airport, although it will continue its existing contracts with local airfreight handlers ABX Air and ASTAR Air Cargo, confirmed a DHL spokesman speaking to Reuters. 

"As a result of the company's focus on international express services, re-establishing DHL Express operations at Kentucky will be more cost-effective for handling the company's international express shipping volumes, and is expected to improve DHL's long-term financial position," DHL said in a statement.

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