Third-party logistics companies continue to invest in warehousing and other supporting capacity in interior provinces of China, as manufacturers look to cut costs by moving away from coastal provinces.
Ceva Logistics, Kuehne + Nagel and Panalpina have all recently pledged heavy investment to expand their respective footprints in central and western China. They were joined today by Kerry Logistics and DHL as they each announced their own new investments in inland facilities.
DHL said it would add up to 656,167 million square feet of warehousing in China over the next two years and identified Wuhan and Chengdu as key growth areas.
“China’s manufacturing base is quickly shifting into its western regions and DHL is actively responding to this trend by expanding our presence there,” said Victor Mok, CEO of DHL Supply Chain North Asia.
“Our planned multi-user logistics centers in Wuhan and Chengdu will facilitate the expansion of production bases into the inland cities by providing time and cost-effective inbound-to-manufacturing logistics services.
The company said it will also strengthen its domestic road transportation and distribution market in China. It did not specify how much the new warehousing would cost.
Kerry Logistics said rising demand had prompted it to start the expansion of its Chongqing Logistics Centre despite the facility only being opened in the first quarter of this year.
“Chongqing is one of the fastest growing cities in Western China and we have seen a rapid increase in demand for warehousing and logistics services,” said Edwardo Erni, Managing Director, Mainland China.
Phase two construction is scheduled for completion in the first quarter of 2013 and will comprise 205,708 square feet of space for warehousing and value-added services housed in two four-storey towers.
Kerry said it would target the auto spare parts, electronics and hi-tech, and telecommunications sectors by offering integrated logistics services from the center.