DHL Express will invest €100 million in eight freighters over the next two years for extraintercontinental and regional flights to its new $175 million North Asia hub at Shanghai’s Pudong
airport that was officially opened at a top-level ceremony today.Customers will benefit from the new hub and additional flights to Asian and intercontinentaldestinations with faster access to international markets with shorter transit times andearlier delivery savings by up to one day, the company said. Customers shipping within the NorthAsia region will have shorter routes, leading to potential savings of up to four hours airtime,later pick-ups and earlier deliveries.
The $175 million hub investment and €100 million spending on aircraft and flight operations aretwo major elements of the €400 million overall investment in China planned for the next fewyears.
The 88,000 sqm facility, with capacity to process 20,000 parcels and 20,000 documents per hourin a 55,000 sqm sorting area, is five times larger than the company’s existing gateway at Shanghaiand will go live this coming weekend. Some 600 employees will work at the 24/7 year-roundfacility.
Frank Appel, CEO of Deutsche Post DHL, stated: “The DHL Express North Asia Hub is a logisticsmilestone in DHL’s Asia Pacific network and the culmination of a multi-hub and aviation strategythat cements our leadership position in terms of connections, convenience and cost-effectiveness.With Asia’s leading economies fast integrating and free trade agreements reducing barriers tointernational commerce, logistics companies need capabilities that are ahead of the curve and offersimplicity, speed and service.”
Speaking at the opening ceremony, he added: “This shows how confident we are in the developmentin China and the whole region. With this upgrade of our network in Asia we will increase thedistance to the competitors even more.”
Located directly alongside UPS’ facility at Pudong, the hub will complement the fully-usedCentral Asia hub at Hong Kong, which can process up to 75,000 items per hour, by handling domestic,regional and intercontinental flows from eastern and northern China as well as Taiwan, South Koreaand Japan.
DHL Express already has intercontinental flights from Shanghai to its Leipzig and Cincinnatihubs as well as to Hong Kong, Tokyo and Osaka.
Over the next few months, it will add flights to Seoul, Taipei as well as the Chinese cities ofQingdao and Dalian. Next year, flights to Beijing, Guangzhou and Xiamen will be added. The Chinaand Asia routes will be operated with a mix of B757s, A300s and B737s.
New intercontinental services operated by Polar Air, Aerologic and DHL Air UK will be added,including a new route linking Shanghai to East Midlands airport in the UK. A new Shanghai –Singapore service is also being planned for the future.
The completion of the North Asia hub caps “an unrivalled” multi-hub Asian network, according toDHL. Together, DHL Express’ four hubs in Asia Pacific – Shanghai, Hong Kong, Bangkok and Singapore– link to over 70 DHL Express Gateways located throughout the region. DHL’s infrastructural networkis served by a comprehensive air network of over 40 aircraft covering 40 countries and territories,and utilising approximately 690 commercial flights per day in Asia Pacific.
Charlie Dobbie, Executive Vice President Global Network Operations, stressed that the Shanghaihub will complement and relieve the Central Asia hub in Hong Kong, and not take volumes away fromit. “These are new volumes. Our volumes going through Hong Kong are extremely high. This is extracapacity at the right time as Hong Kong is nearing capacity,” he said. Some domestic China volumesto and from northern cities would no longer need to fly “a long V-route” down to Hong Kong andback, he explained.
Ken Allen, Global CEO of DHL Express, commented: “The DHL Express North Asia Hub will play acritical role by supporting growth, improving transit times and network reliability, and providinga foundation for later pick-ups and earlier deliveries for customers across North Asia.” DHLExpress is still growing fast in China, Allen stressed. “In China there is massive growth in SMEsthat are now looking to expand overseas. A large part of our growth in 2012 is from first timebuyers who are looking to move on to the global stage.”
Jerry Hsu, CEO, DHL Express Asia Pacific, added: “Leveraging increased regional andinternational flight connections through Shanghai, DHL will be able to provide greater flexibilityand reliability to customers choosing time-definite morning delivery to major cities in North Asiaand greater regional connections across North Asia as well as intercontinental links to Europe andthe US.”
DHL-Sinotrans, the DHL Express joint venture with state-owned Chinese transport group Sinotrans,is maintaining double-digit growth, has expanded its network and flights, and is looking to investin future growth regions and new industry sectors in China, Hsu said.
The company, serving 404 Chinese cities, has now some 6,000 employees, 1,800 delivery vehicles,108 service centres and 10 gateways while its air network comprises 66 dedicated internationalflights a week and capacity on more than 2,000 domestic flights. “DHL uses commercial flights fordomestic uplift and we are looking for opportunities to do more,” he commented. The operator’son-time delivery performance last year was 95.9%, he added.
Recent flight improvements include two Polar Air B747 services to Eastern China, Japan andKorea, a larger capacity Airbus on the Beijing – Hong Kong route, a B747 on the Shanghai-Hong Kongroute and five weekly Hong Kong-Chengdu flights.
Looking ahead, Hsu said DHL plans to speed up investment in future high growth regions such asSouthwest China (Chengdu and Chongqing), the Central cities of Wuhan and Zhengzhou, and theNorth-East region (Dailian, Shenyang, Changchun and Harbin). It is also targeting emergingindustries in diverse regions including auctions, optics, wigs and dentures, wedding gowns andsolar energy, he added.
