DHL Express invests ~EUR750 million in Asia Pacific on the back of e-commerce growth

  • From
    2020 to 2022, DHL Express Asia Pacific is spending close to EUR 690 million on
    infrastructure build across key markets in the region to increase capacity and
  • Approximately
    EUR 60 million has been committed to boost its air network with new aircraft
    and new routes
  • DHL
    Express is ready for historic 2020 peak season with 30-40% increase in shipment
    volume expected

SINGAPORE - Media OutReach - 12 November 2020 - DHL Express, the world's leading
express service provider, announced today that it is investing circa EUR 690
million between 2020 and 2022 to build or expand its facilities in key growth
markets of Australia, Japan, Hong Kong S.A.R. and South Korea. Equally, it intends
to spend close to EUR 60 million to bolster its Asia Pacific air network such
as introducing direct, new (e.g. Vientiane, Yangon), and frequent (e.g.
Oceania) flight routes.


DHL Express expects
shipment volumes in Asia Pacific to be 30-40% larger than last year's peak
season, which typically starts around November and lasts until Lunar New Year. "These
investments are 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. Since the start of 2020, DHL
Express has experienced a 50% surge in e-commerce shipments in 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 EUR 71.4 million, it 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 S.A.R.,
one of DHL Express' three global hubs, has a EUR
377 million expansion underway that will boost warehouse space by 50% to
47,000 sqm and increase the hub's annual throughput to 125,000 pieces per day.
This means that the hub will be handling six times more in terms of shipment
volume than when it was first opened in 2004.


Furthermore, a EUR
131 million planned investment in a gateway facility in Incheon, Seoul, South Korea will boost shipment
processing capacity by approximately 160%, equipping it to service demand from
some of the region's most advanced economies. The expansion will almost triple the
facility's gross floor area to 58,700 sqm, making it DHL Express' largest
gateway in Asia Pacific.


South & Southeast Asia investments

In Bangladesh, DHL Express is investing
~EUR 25 million to build a new facility that will combine its country office
and service center into a 10,000 sqm site. The new facility will bring about an
approximate 35% increase in shipment processing capacity, and is expected to be
opened in Q1 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 EUR 39.4 million facility will be situated at the Kuala Lumpur
International Airport and is scheduled to be completed by 2022. At the same time,
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


Oceania investments

Many SMEs in Australia
and New Zealand, which have traditionally relied on economy services, are
increasingly switching to express delivery services. This trend has led to a
more than 40% increase in DHL Express Australia's inbound and outbound volumes
since May 2020. DHL Express has significantly increased its number of dedicated
flights to and from Australia to around 30 regular services per week, compared
to 10 before the Covid-19 pandemic hit. This includes a new flight that
connects Melbourne, Auckland and Christchurch, as well as a new 4x-a-week
flight between Hong Kong S.A.R. and Sydney.


In September, the
company launched its EUR31 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 will kick start operations at the expanded Brisbane Gateway
and Service Center, in which the company will spend EUR 13.2 million to
increase floor space by 148% and double its processing capacity. New and
expanded facilities are also being planned for Melbourne and Adelaide in the
near future. 


"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. 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," said Sean Wall,
Executive Vice President, Network Operations & Aviation, DHL Express Asia


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. Globally, the company has increased the number of its daily flights
significantly. This includes four new Boeing 777F wide-body aircraft that were
put into service just this year, with two more expected to be delivered next
month. These six additional aircraft will enable DHL Express to carry out more
than 3,000 additional intercontinental flights per year.


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DHL is the
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DHL is decisively positioned as "The logistics company for the world".


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