DHL Express Invests EUR750 Million in Asia Pacific on the Back of E-Commerce Growth
The COVID-19 pandemic has undoubtedly changed the e-commerce industry for good – many retailers have responded by moving their businesses online to better manage risks. The acceleration of the industry, fueled by improvements in technology and processes, has presented businesses with more opportunities to operate remotely whilst still retaining control of their supply chains and operations.
The boom of e-commerce is also apparent in our everyday lives. In Singapore, many businesses have been aggressively marketing their brand digitally, while popular e-commerce shopping platforms or apps have also been expanding to cater to a larger spectrum of audiences. Despite the abrupt challenges posed by the pandemic, e-commerce and international logistics have prevailed as the solution for global connectedness.
DHL Express and the logistics industry have always been susceptible to peak season* surges. However, in 2020 the peak season is forecasted to be amplified up to 40% due to e-commerce trends, posing a massive challenge on global supply chains and logistics networks all over the world.
*The peak season is typically defined from Black Friday, which happens on the 27th of November 2020, all the way up to the end of January 2021.
DHL EXPRESS’ RESPONSE
DHL Express’s cross-border delivery prowess can be attributed to its well-established global network. Over the years, we have continuously made significant investments in expanding our flight capabilities and infrastructure to better serve our customers.
In the month of November of 2020, DHL Express announced an investment of circa EUR 690 million for the next 2 years to expand our network capabilities in various key markets such as Australia, Japan, Hong Kong, and South Korea. An additional EUR 60 million was also announced to introduce direct flights into the Asia Pacific region to enhance our transit times.
These investments aim to support the growth in shipment volume expected in these regions due to increased demand for our time-definite services that offer next day time-guaranteed deliveries.
“75% of the world is covered in water, the rest is covered by DHL Express.”
With the help of technology, data, and a keener focus on network performance in recent years, DHL Express gets a front row seat to trade movements comprising of the imports and exports of the world. This helps us to identify potential markets for investment.
NORTH ASIA INVESTMENTS
DHL Express Japan is scheduled to open Osaka Distribution Center, its largest distribution facility in the country, by the end of 2020. This state-of-the-art compound boasts industry-leading sorting systems and X-ray inspection machines dedicated to reducing the time required to process shipments.
Our Central Asia Hub (CAH), located in Hong Kong, that connects our region to the rest of the world with daily flights in and out of the , will also undergo a major upgrade to improve processing time. The expansion of infrastructure would allow CAH to process approximately 125,000 shipments per hour, 6 times more than before.
Finally, our Incheon Gateway in South Korea, that services some of the most advanced economies in the region, will also be going through a massive expansion, which will make it our largest gateway in the Asia Pacific at 58,700sqm!
SOUTH & SOUTHEAST ASIA INVESTMENTS
Bangladesh and Malaysia will each have a new facilities with improved handling, processing, and volume capabilities targeted to be completed by 2022. Up to EUR 39.4 million will be spent on our facility located at the Kuala Lumpur International Airport.
By 2021, Bangalore will have a new gateway, creating the opportunity for better connectivity within India.
Other improvements include the purchase of a brand new Boeing 777-LRF aircraft that will allow direct network flights up to 4 times a week from Singapore to Americas to better connect Southeast Asia.
SMEs in Australia and New Zealand have been switching to express couriers in recent months – adding up to a whopping 40% increase in DHL Express Australia’s inbound and outbound volumes since May 2020. These shipments are routed to Hong Kong before transiting to global destinations.
A significant portion of investments has been allocated to our Oceania business to improve our sorting and handling capabilities together with the growth in demand for DHL Express services. Since September 2020, the newly expanded Sydney Service Center has been operating with high-speed sorting systems that will allow processing of up to 4,300 shipments per hour.
The Brisbane Gateway and Service Center has also been allocated EUR 13.2 million to increase floor space and processing capabilities. Upgrades to the Melbourne and Adelaide facilities are also in discussions in the near future. These investments will extend DHL Express’s capabilities to handle larger volumes with greater efficiency, while also reducing the international transit-times from both Australia and New Zealand.
INVESTING IN EXCELLENCE
DHL Express, the world’s leading international courier, currently has 23 dedicated aircrafts and operates about 1040 flights a day. In the coming years, we are looking at investments to increase our fleet and network flights to introduce more than 3,000 additional intercontinental flights per year.
Our dedication to offering a consistent and reliable service is yet again demonstrated through these investments. The focus to strengthen our network capabilities and operational efficiency is a testament of how we aim to incorporate resilience to continuously serve the needs of our customers.
Although a full recovery from the pandemic might take years, we are observing growth and opportunity in various sectors and regions – an optimistic glimpse for progress toward more robust and connected economies. Industries such as the e-commerce sector continue to provide the opportunity for businesses of all sizes to reach international audiences.
These forecasted growths might be met with disruptions due to the slow recovery of the airline industry, an issue that DHL Express wants to avoid. By investing up to EUR 750 million to improve our infrastructure and flight capabilities, we want to better prepare ourselves for the changes in the commerce scape.
Find out more about how your business can benefit from DHL Express today!