DHL Express, one of the biggest express services providers in the world, said on Tuesday that it would invest HK$2.9 billion (US$371 million) to expand capacity of its Central Asia Hub (CAH) in Hong Kong by 50 per cent to cater to the rapidly growing international trade demands in the region and around the world.
DHL said that once the expansion is complete in the first quarter of 2022, the hub would be able to process 125,000 shipments per hour compared with the 75,000 units currently.
When operating at its full capacity, the annual throughput of the expanded hub is expected to go up by 50 per cent to 1.06 million tonnes per year.
“Given the expected rise in international e-commerce and intra-Asian trade, DHL is committed to strengthening our global network and services,” Ken Allen, chief executive officer of DHL Express, said at a press conference to announce the expansion plans.
Ken Lee, chief executive officer of DHL Express Asia-Pacific, said the facility will be equipped with fully automated X-ray inspection machines. “[This] will increase the speed of our shipment inspection by three times – enabling us to significantly expedite the processing speed of shipments that come through the CAH.”
When asked about his views on consolidation in the logistics sector, Allen said that the US$4.8 billion acquisition of Dutch package delivery firm TNT Express by FedEx in May 2016, was possibly the last major deal in the industry.
“I think [the consolidation] is finished,” said Allen. “FedEx’s acquisition of TNT was sort of the last one.”
DHL, UPS and FedEx between them account for almost 80 per cent of the international logistics market.