DHL Express invests EUR750m in Asia-Pacific

E-commerce growth is spurring the investment.

DHL Express will invest to build or expand its facilities in key growth markets of Australia, Japan, Hong Kong, and South Korea up to 2022. And in better news for companies needing to ship directly to other Asian countries, the courier firm will open up more direct links such as from Vientiane, Laos to Yangon, Myanmar as well as more frequent flight options within Oceania.

The firm expects shipment volumes in APAC to be 30-40% larger than last year's peak season, which typically starts around November and lasts until Lunar New Year.

The expanded infrastructure and new flight routes across APAC 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 APAC.

For manufacturers this will mean more options to ship components or finished goods around the region faster and through more direct routes.

The firm notes its 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 EUR71.4m, 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.

In Hong Kong, one of DHL Express' three global hubs, there is a EUR377m 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.

Then there is a EUR131m 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 sq m making it DHL Express' largest gateway in APAC.

South and Southeast Asia investments

In Bangladesh, DHL Express is investing ~EUR25m 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 EUR39.4m 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 deliveries.

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 and Sydney.

In September, the company launched its EUR31m 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 EUR13.2m 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.

DHL Express currently has 23 dedicated aircraft in its APAC fleet, and operates approximately 1,040 flights per day. The company will be adding a new Airbus A330-300P2F to its APAC 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.