As Global Trade Gets Set To Boom, Freight Forwarder DHL Gets Ready With Massive Expansion
As the global trade in the near future is looking up, DHL launches a major expansion to its Central Asian Hub.
The freight forwarding firm DHL is never afraid to jump first. While many other Western companies hesitated when China began opening up its central and western realms, DHL plowed ahead, opening new hubs in places that are now some of the most economically dynamic cities in the world. When the international media was harbingering the coming collapse of China in 2014 as growth slid to a 24-year low, DHL upped their stakes in the country by 50%, tacking on six new logistics facilities that are set to open in 2020 — a year when China is now predicted to be stronger than ever. When the bulk of the transport industry in Europe was mocking trans-Eurasian rail, DHL was out in places like Chengdu, Suzhou, Manzhouli, Khorgos, and Małaszewicze, laying down the foundations for what is today a booming 30+ route network that has become a very attractive and lucrative trans-continental transport option.
“They’re kind of like the cowboys of logistics,” I recently explained to a documentary production crew who was looking to include the company in a film, “they send one guy out to the middle of nowhere and tell him to build a hub, and then a couple of years later there is a hub.”
With a growth strategy built upon the wits and capabilities of its individual employees, DHL has emerged as the undisputed leader in global logistics, with a network that spans 220 countries and territories, 350,000 employees, over 180 million shipments per year, and a yearly revenue haul in the ballpark of $67.5 billion.
"We've had 27 consecutive quarters of growth of more than 7%,” Ken Allen, DHL Express's Global CEO, pointed out proudly.
But not content with the progress they’ve made, DHL is now jumping into another major endeavor as they continue gearing up for what has clearly become the Asian century, as once-rapidly-developing economies across the region begin maturing into true epicenters of global trade.
The Central Asia Hub
DHL's Central Asia Hub is located directly beneath the Zhuhai-Macau Bridge, the longest sea bridge... [+]
Located directly beneath the soon to open Hong Kong-Zhuhai-Macau Bridge — the longest sea bridge in the world — within the bosom of Hong Kong International Airport is DHL’s Central Asia Hub (CAH). This is a purpose-built air express cargo facility that’s dedicated to being a gateway for premium goods to enter and exit the Asia-Pacific realm. 23 dedicated DHL aircraft depart from the facility each night and every single day DHL cargo is flown out on 800 commercial flights.
Ken Lee, the CEO of DHL Express Asia Pacific, explained the Central Asia Hub to me as being "The International gateway of anything out of China that ships to the rest of the world."
"This is probably the only facility in the world where you fly for five hours and reach 50% of the world's population,” added Tony Khan, the General Manager of the hub.
Dedicated DHL airplanes at the Central Asia Hub in Hong Kong.
Hong Kong is the heart of DHL’s Asian theater, and the CAH is one of company’s triumvirate of global hubs — the others being Leipzig in Germany and Cincinnati in the USA — directly linking into booming metropolises like Shanghai, Singapore, and Bangkok. Rapid growth has become a standard here, as the hub steadfastly expands through both the fat and lean times of the global economy.
"We have been enjoying double digit growth every year over the past ten years, non stop," Lee exclaimed. "It's amazing to watch how much volume is flowing through here.”
Worker at DHL's Central Asia Hub.
Now DHL is doubling down on the success of the Central Asia Hub. Earlier this month, the freight forwarder announced that it will be pumping an additional $400 million to expand the facility — increasing their current commitment by around 180%, making it the largest investment the company has ever made in the Asia-Pacific region.
Via this expansion, the Central Asia Hub will up its capacity from 75,000 to 125,000 pieces of shipments per hour, which is expected to increase annual output by 50%, eventually eclipsing 1.06 million tons per year.
"A million tons per year is huge,” Lee declared.
For scale, the entire Hong Kong airport is currently shipping about four million tons of cargo annually.
DHL's Central Asia Hub. While not sexy, these places are the arteries of world trade.
"It's all coming back,” Allen proclaimed. "World trade is far better than you'll ever read about in the newspapers or see on TV."
"I think people forget what we went through," the CEO continued. "I mean, 2008/09, you had the Lehman crisis and all of the restructuring that went on after that. Then 2011/12 you had the Euro crisis, where Europe really had to restructure its whole economy... From about 2008/09 through to about 2015 you had a really tough environment for normal commercial companies. Now everybody is growing again. Everybody. The big b2b businesses are back at 8% and e-commerce is a revolution. I just think it's so exciting what could happen."
DHL's supercharged Central Asia Hub is strategically slated to begin operations at the beginning of 2022, just in time for the opening of Hong Kong International Airport’s much-awaited third runway and for China to take the title of world's largest economy.