DHL Express announced that it is investing €690 million (US$817 million) between 2020 and 2022 to build or expand its facilities in key growth markets of Australia, Japan, Hong Kong and South Korea.
It also intends to spend close to €60 million (US$71 million) to bolster its Asia Pacific air network such as introducing direct, new (Vientiane, Yangon), and frequent (Oceania) flight routes.
DHL Express noted that it expects shipment volumes in the Asia Pacific to be 30-40% larger than last year’s peak season, which typically starts around November and lasts until Lunar New Year.
Unprecedented volume growth
“These investments are a testament to our continued confidence in the region. They are crucial not only in the near term as we expect to tackle an unusually strong peak season, but it will make sure that we are well-positioned in the long run to keep global trade running as e-commerce and cross-border trade grow,” said Ken Lee, CEO of DHL Express Asia Pacific.
The expanded infrastructure and new flight routes across Asia Pacific will help the company tackle the unprecedented growth in shipment volume and address the ever-growing demand for time-definite express deliveries.
DHL noted that since the start of 2020, it has experienced a 50% surge in e-commerce shipments in the Asia Pacific (excluding China).
North Asia investments
The Osaka Distribution Center in Japan scheduled to be opened by the end of 2020 will be DHL Express’ largest distribution facility in the country. With an investment of €71.4 million. The facility will have 21,000 square meters (sqm) of floor space and is equipped with a state-of-the-art sorting system and X-ray inspection machines.
The company’s Central Asia Hub (CAH) in Hong Kong, one of DHL Express’ three global hubs, has a €377 million expansion underway that will boost warehouse space by 50% to 47,000 sqm and increase Page 2 of 4 the hub’s annual throughput to 125,000 pieces per day.
DHL Express said this means that the hub will be handling six times more in terms of shipment volume than when it was first opened in 2004.
A separate €131 million planned investment in a gateway facility in Incheon, Seoul, South Korea will also boost shipment processing capacity by approximately 160%, which it said will service demand from some of the region’s most advanced economies.
This investment according to DHL will almost triple the facility’s gross floor area to 58,700 sqm, making it DHL Express’ largest gateway in the Asia Pacific.
South & Southeast Asia investments
In Bangladesh, DHL Express said it is investing €EUR 25 million to build a new facility that will combine its country office and service centre into a 10,000 sqm site and is expected to be opened in the first quarter of 2022.
The new Kuala Lumpur Gateway in Malaysia, which is almost triple the size of DHL Express’ current facility, will increase the company’s processing capacity by more than 200%. The facility to be located at the Kuala Lumpur International Airport is scheduled to be completed by 2022.
DHL Express also said construction of a new gateway facility in Bangalore, India is underway, slated to be ready by 2021.
Utilizing a brand new Boeing 777-200LRF with a capacity of up to 102 tons, DHL Express now flies four times a week from its US hub in Cincinnati and the Los Angeles gateway to the DHL Express South Asia Hub in Singapore, via Sydney.
"The dedicated route shortens transit time for shipments to and from the US and allows DHL to operate with greater efficiency while meeting the mounting demand for express deliveries," it said.
In September, the company launched its €31 million Sydney Service Center, which is double the size of the previous facility and is equipped with an automated high-speed sorting system that processes up to 4,300 shipments per hour.
By end 2021, DHL Express said it will kick start operations at the expanded Brisbane Gateway and Service Center.
“The pandemic has caused unparalleled changes to the air cargo industry and it will likely take a long time for the industry to recover to pre-pandemic levels. But having a dedicated fleet and well-implemented contingency plans have helped to keep our network fully operational despite the overnight disappearance of commercial air belly cargo space," said Sean Wall, executive vice president, Network Operations & Aviation, DHL Express Asia Pacific.
"The growth in e-commerce shipment volumes will continue to outpace the available air cargo capacity in the industry, strengthening the case to invest in adding new dedicated aircraft to our fleet, open up new routes, and supplement our fleet with charter flights,” he added.
DHL Express currently has 23 dedicated aircraft in its Asia Pacific fleet, and operate approximately 1,040 flights per day. The company will be adding a new Airbus A330-300P2F to its Asia Pacific fleet in February 2021, as well as a new Boeing 737-800F in March 2021.