DHL Express opened its largest hub in Asia today (July 12), the latest step in the logistics major’s massive roll-out of new capacity across Asia’s key freight markets.
The $175 million North Asia Hub, located at Shanghai Pudong International Airport, is designed to boost capacity and speed across its Asia-Pacific express operations as demand rapidly increases.
The 288,640-square-foot facility can process up to 20,000 documents and 20,000 parcels an hour. It will complement existing operations at express hubs in the region at Bangkok, Hong Kong and Singapore.
DHL also said it would invest a further $132 million over the next two years to add eight dedicated aircraft to service high demand routes between Shanghai and North Asia, Europe and the U.S. In the coming months, direct connections from Shanghai to Incheon, Taipei and Chinese cities such as Dalian and Qingdao will be added, with Beijing and Xiamen services scheduled to start next year.
Jerry Hsu, CEO of DHL Express Asia-Pacific, said express demand has been healthy despite the stalling U.S. recovery.
“In Asia, some GDP growth numbers have been revised downwards, but we are growing faster than GDP rates, the market and our competitors,” he added. “China is double-digit (growth). India is high. Japan is bouncing back. Southeast Asia is doing well.”
Hsu also said intra-Asia express demand is growing and is now the major driver of express growth in the Asia-Pacific.
The new Shanghai hub will help ease demand at near-capacity Hong Kong and also give DHL faster access to export volumes out of the fast-growing Yangtze River Delta, which accounts for more than a third of China’s exports.
“Pearl River Delta manufacturing capability has moved somewhat to the Yangtze River Delta, there is a migration of high-end manufacturing, but PRD is keeping lots of its traditional manufacturing,” Hsu said.
The new hub is part of the company’s ambitious expansion strategy for the Asia-Pacific. In June, a new distribution center for life sciences and health care opened in Mumbai, India, as well as a new multiuser warehouse in Jakarta, Indonesia.
Later this month, DHL will also open a new supply chain “mega hub” in Hong Kong and a new integrated logistics center in Shenzhen, while a new LCL global forwarding hub is due to be open in August in South Korea. Later this year, the company’s air freight bonded facility in Shanghai will be expanded.
Deutsche Post DHL CEO Frank Appel said that within five years almost a third of the company’s total revenue would be generated in the Asia-Pacific, up from 19 percent last year.
China will be the driver of much of the increase, but the company has invested some $2.5 billion across the region in recent years, and more than $300 million has already been earmarked for new projects in the upcoming years.
“The new hub will further help us extend our lead over our competitors in the region,” Appel said.
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