DHL will build its North Asia hub in Shanghai with a total investment of US$175 million, the giant integrator announced today.
The facility will be located at the Shanghai Pudong International Airport, serving the vibrant North Asia region and providing DHL customers with greater regional connections and intercontinental links to Europe and the US.
This brings DHL's total investment in Asia Pacific to a phenomenal $2.2 billion in the past few years.
A signing ceremony was held today in Shanghai to mark the investment milestone, officiated by Dan McHugh, CEO of DHL Express - Asia Pacific, and Wu Nian Zu, chairman and president of the Shanghai Airport Authority (SAA), as well as senior executives from DHL and SAA.
Scheduled to be completed in the second half of 2010, the North Asia hub will play a catalytic role to boost DHL's growth in Asia Pacific and strengthens its market leadership in China and the region to meet increasing regional and international trade growth.
The establishment of the North Asia Hub reinforces DHL's multi-hub strategy in Asia Pacific as it complements the Central Asia hub in Hong Kong, as well as hubs in Bangkok, Incheon,
Singapore and Sydney. Together, the six hubs will be linked to close to 50 DHL Express gateways strategically located throughout Asia Pacific, providing customers with the most extensive network infrastructure in the region and beyond.
To be sited at an airside location adjacent to the upcoming runway three in the west cargo handling area of Shanghai Pudong, the new 55,000 sqm North Asia bub, built on a total land area of 88,000 sqm, will be equipped with a quality control center (QCC) that also serves as a nerve center for crisis management.
Operating 24/7, the DHL QCCs are a network of regional and country centres that proactively monitor all DHL shipments in the air and on the ground round the clock. The North Asia hub will also be equipped with an automated sorting system to maximise operational capability, enhancing efficiency and speed in cargo processing to provide customers with even better time-to-market capabilities. It will have the capacity to sort conveyable shipments to a peak capacity of up to 20,000 parcels and 20,000 documents per hour.
The establishment of the North Asia hub will result in transit time improvements across North Asia and, in particular, benefit customers located in the Yangtze River Delta. With the excellent air connections to and from the Shanghai Pudong, DHL will be able to leverage regional and international flights to provide added flexibility for its customers with guaranteed time-definite morning delivery for more major cities in North Asia.
Currently, DHL utilises more than 500 commercial and dedicated flights per week in China. In Asia Pacific, DHL's customers are served by over 20 dedicated aircraft serving more than 30 destinations in 16 countries and territories. DHL also utilises more than 800 commercial flights daily in the region.
This year, DHL entered two strategic partnerships to further boost its global aviation strategy. In June, DHL Express completed a strategic partnership transaction with air cargo carrier Polar Air, in which DHL Express holds a 49 percent stake. Recently, in September, DHL Express and Lufthansa Cargo also established a joint cargo airline.
These partnerships, effective from late-2008 and April 2009 respectively, will enable DHL to meet the expected strong increase in demand for cargo space between Asia Pacific and Europe as well as the US, providing customers with assured long-term airlift capacity for their shipments.
"Today's announcement underlines DHL's strong commitment and confidence in the Shanghai Government's vision of establishing the city as a world economic center, as well as the Shanghai Airport Group's objective of building Pudong International Airport as the international air hub of choice," said McHugh.
"Our task as a global logistics provider is to network the world. We are confident that this hub will give us an even greater competitive edge in managing the huge and complex global trade that is being routed to this region."
Wu said: "Today, the official announcement makes Shanghai Pudong International Airport the first in the world with two international transferring hubs. This shows that China is playing an increasingly important role in the world economy, and Shanghai has an important, irreplaceable position in the global air network.
"Meanwhile, it is of important strategic significance to accelerate the implementation of the national strategy of Shanghai air hub, take the lead in establishing the position of Shanghai airport as an international air cargo hub, promote the development of Shanghai especially as a shipping center, enhance the city's service function of Shanghai, and strengthen the service capacity for the economic development of Yangtze River Delta and even the whole of China."
Jerry Hsu, president, greater China area for DHL Express, noted: "DHL has continuously strengthened its presence in China, with a total investment of $615 million in recent years. As an indication of our commitment to our customers in China, DHL will soon operate two key facilities - the North Asia hub in Shanghai and the Central Asia hub in Hong Kong - serving two of the fastest-developing regions in the Yangtze River and Pearl River Deltas respectively, in one of the fastest-growing economies in the world."
According to China's National Bureau of Statistics, the Yangtze River Delta accounts for almost 35 percent of China's total value of imports and exports. In the Yangtze River Delta - the most active economic zone in China - Zhejiang Province is the region's engine of growth.
In 2006, the total value of Zhejiang's imports and exports was close to $140 billion, representing a growth of about 29.6 percent over 2005, and its growth in exports tops all the coastal regions in China. The importance of China was also highlighted in a recent Economist Intelligence Unit briefing paper titled Trading up: A new export landscape for ASEAN and Asia, which examined the movement of goods across borders in Asia and confirmed the dominance of China in Asian trade, as well as an exporter to North America and Europe.
Prior to the completion of the North Asia hub, DHL's existing Pudong gateway, located close to the airport's Express Handling Center, will continue to meet the company's business growth in the Yangtze River Delta region. The Pudong gateway, one of DHL's four major gateways in China, is already a major center for imports and exports in the region, and complements DHL's other gateways in Beijing, Guangzhou and Shenzhen.
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