DHL Express has announced that it has entered into a long-term agreement with freighter operator, Cargojet, that will further strengthen the global DHL aviation network.
The five-year agreement, with a renewal option for an additional two years, will see Cargojet provide ACMI, CMI, charter, and aircraft dry lease services to DHL to support its international requirements for Europe and North, South, Central, and Latin America, as well as Asia.
The partnership also opens the possibility of DHL acquiring shares in the Ontario-based cargo airline.
Cargojet currently utilizes 12 freighters to service DHL's requirements. DHL intends to add 5 additional B-767 freighters during the 2022-23 timeframe to fulfill its anticipated network requirements, building on the rapid expansion of the company's air network in the last two years.
In the Americas, DHL increased its overall aviation capacity by 18% for the 2021 peak season in response to surging demand, particularly in the e-commerce segment.
Boosting intra-regional, intercontinental links
It also recently added a new weekly air connection from Vietnam to the US, adding 102 tons of additional capacity for customers shipping out of Asia into the Americas region.
"Cargojet is an important aviation partner of DHL in North America and we see this expansion of our relationship further strengthening intra-regional and intercontinental links to and from this region," said Mike Parra, CEO, DHL Express Americas.
"Its versatile cargo fleet and high on-time reliability position us well to further capitalize on the dynamically growing e-commerce market, in particular. This step builds on the significant investments we have made in DHL's aviation capacity and capabilities over the last two years in the Americas."
DHL said in a statement that it also intends to be Cargojet's inaugural launch customer for the state-of-the-art B777 wide-body long-range conversion cargo aircraft, which are expected to be deployed in late 2023 or early 2024.
The express firm also noted that the more fuel-efficient freighter will support DHL's efforts to improve the carbon footprint of its transportation operations while enabling customer growth.
Travis Cobb, EVP, Global Network Operations & Aviation, DHL Express said a longer-term strategic alignment with Cargojet will bring additional capacity and allow DHL to further expand its services.
Ajay Virmani, Cargojet's chief executive officer said the freighter operator will issue to DHL warrants to acquire up to 9.5% of Cargojet’s outstanding voting shares at a price of C$158.92 per share over a period of seven years, with vesting tied to the delivery by DHL of up to C$2.3bn in business volume during the same term.
