DHL, the German logistics giant, is defying the slowdown in the freight industry by scaling up its global distribution capabilities. The company recently unveiled the expansion of its Central Asia Hub (CAH) in Hong Kong, just a week after announcing plans to introduce robotics to four additional warehouses.
The investment in the CAH expansion amounted to $409.7 million, increasing the warehouse’s total space by 50 percent to 533,000 square feet. With the introduction of an automated material handling system, the hub’s peak handling capacity has surged by nearly 70 percent to 125,000 shipments per hour, handling almost 20 percent of DHL Express’ global shipment volume. Moreover, the annual total throughput is forecasted to increase by 50 percent to 1.1 million tons when operating at full capacity.
The CAH is a key part of DHL’s global infrastructure, handling over 200 dedicated flights per week. The company’s investment in the hub over the past two decades has reached $611.8 million. Positioned just a four-hour flight away from the Pan-Pearl River Delta region in southern China, the CAH is a vital link in DHL’s Asia Pacific air network.
By expanding its overseas presence, DHL Express aims to capitalize on the strong growth in trade between Asia and other continents. Despite the global trade slowdown caused by the COVID-19 pandemic, DHL has experienced a remarkable 30 percent increase in throughput during the first three quarters of 2023, compared to the same period in 2019. Ken Lee, CEO for Asia Pacific at DHL Express, believes that the expanded CAH will enhance connectivity and contribute to the region’s economic growth.
In addition to the CAH expansion, DHL’s contract logistics division, DHL Supply Chain, is deepening its partnership with robotics technology firm AutoStore. AutoStore specializes in automated storage and retrieval systems and plans to bring its robotics technology to four more DHL warehouses. DHL intends to construct five additional facilities that will utilize AutoStore’s automated solutions.
DHL’s commitment to expanding its distribution capabilities through technological advancements demonstrates its determination to adapt and thrive in a challenging market. Despite experiencing a decline in revenue and net profit in the third quarter, the company remains focused on developing innovative solutions to meet the evolving needs of its customers.
1. What is DHL’s Central Asia Hub (CAH)?
DHL’s CAH is a key part of the company’s global infrastructure, located in Hong Kong. It handles a significant portion of DHL Express’ global shipment volume and supports the expansion of trade between Asia and other continents.
2. How has DHL expanded the CAH?
DHL invested $409.7 million to expand the CAH, increasing its total space by 50 percent and introducing an automated material handling system. The hub’s handling capacity and annual throughput are expected to substantially increase as a result.
3. What is the significance of DHL’s partnership with AutoStore?
DHL’s partnership with AutoStore aims to enhance the company’s warehouse operations through the use of robotics technology. AutoStore’s automated storage and retrieval systems optimize inventory management and are particularly suited for e-commerce and businesses handling smaller products.
4. How is DHL adapting to the freight recession?
Despite the challenges posed by the freight recession, DHL remains committed to expanding its global distribution capabilities. By investing in technology and innovative solutions, the company aims to meet the changing demands of the market and continue its growth trajectory.