DHL Express outlines €750 million investment in Asia Pacific
Around €690 million will be spent to expand hubs in Australia, Japan, Hong Kong and South Korea, and €60 million to bolster its air network.
November 18, 2020
By PLA Editor
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DHL Express said it will invest around €690 million between 2020 and 2022 to build or expand its facilities in Australia, Japan, Hong Kong and South Korea. It also plans to spend close to €60 million to bolster its Asia Pacific air network with new direct and frequent flight routes.
The expanded infrastructure and new flight routes across Asia Pacific are said to help the company tackle the unprecedented growth in shipment volume and address the demand for time-definite express deliveries. Since the start of 2020, the express operator has experienced a 50 percent surge in e-commerce shipments in Asia Pacific (excluding China) and expects volumes to be 30-40 percent larger than last year’s peak season.
North Asia investments
Osaka Distribution Center (€71.4 million): Scheduled to be opened by the end of 2020, this distribution facility will be DHL Express’ largest in the country, with 21,000 square meters (sqm) of floor space and a state-of-the-art sorting system and X-ray inspection machines.
Central Asia Hub (CAH) in Hong Kong (€377 million): Expansion is underway to boost warehouse space by 50 percent 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.
Gateway facility in Incheon, Seoul (€131 million): This planned investment will boost shipment processing capacity by approximately 160 percent. 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
Bangladesh facility (€25 million): DHL Express will build a new facility that will combine its country office and service centre into a 10,000 sqm site. The new facility is expected to be opened in Q1 2022.
New Kuala Lumpur Gateway in Malaysia (€39.4 million): Expected to increase the company’s processing capacity by more than 200 percent. The 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.
Brand new Boeing 777-200LRF (capacity of up to 102 tonnes): 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.
With more than 40 percent increase in DHL Express Australia’s inbound and outbound volumes since May 2020, DHL Express has increased the 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 and Sydney.
In September, the company launched its €31 million Sydney Service Center, 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, where the company will spend €13.2 million to increase floor space by 148 percent and double its processing capacity.
“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 Pacific.
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.