DHL Strengthens Global Network

DHL's network expansion doubles capacity at its Asia hub, which will absorb increased intra-regional and intercontinental traffic.

With the completion of the expansion work on its Central Asia Hub (CAH) in Hong Kong, DHL Express believes it will drive growth in the region.

Situated at the Hong Kong International Airport, the expanded CAH is one of the main intercontinental hubs in DHL Express’ global air network, connecting the Asia Pacific region with the other regions in the world. It will also serve as one of the main Asian bases for DHL’s airline partners Polar Air and AeroLogic who will operate growing transpacific and Euro-Asian trade lanes from October this year and spring 2009 respectively.

“Asia Pacific continues to be a key growth driver for DHL Express and the expansion of the CAH is a testament to the ongoing expansion of both intercontinental and intra-regional trade lanes,” said John Mullen, DHL Express CEO. Mullen served as the company’s regional CEO from 2002 to 2004 and helped DHL Express achieve continuous annual two-digit growth in Asia Pacific. “It’s fantastic to see that the Hong Kong hub has grown to this extent within just a few years,” said Mullen.

The CAH in Hong Kong is DHL Express’ main regional hub in Asia Pacific. It serves as one of the region’s main gateways to China and as a catchment area for the Pearl River Delta area, one of China’s main manufacturing bases. CAH is also the home base for Air Hong Kong, DHL's joint venture with Cathay Pacific.

Dan McHugh, CEO, DHL Express Asia Pacific said that at present, over 60% of express cargo processed by the Central Asia Hub is intra-Asia Pacific shipments and the figure is expected to continue growing alongside rising intra-regional trade. “With over 40% market share and US$2.2 billion invested in the region, DHL’s US$210 million investment in the CAH provides the core backbone to further enhance service excellence and will assist in extending our market-leading position in Asia Pacific,” said McHugh.

Strategically located within a four-hour flight time to major cities in Asia Pacific, the CAH is complemented by a well-established Asia Air Network which is served by more than 20 aircraft and over 500 commercial daily flights.

The CAH is the first large-scale automated express hub in the Asia Pacific and its completion five years ahead of schedule, underscores the growth and potential DHL forecasts in the region, the company said.

The Central Asia Hub has doubled in size to 35,000 square meters and is expected to handle 40 million shipments in 2008.

The new automated facility has a throughput of 75,000 pieces per hour (pph) of flyers and conveyable shipments which is an increase of 114%. The throughput cycle time has also been further reduced from 12 minutes to just 7 minutes.

The increased throughput of the automated CAH is possible because of an advanced Autosort system which can handle 35,000 conveyable shipments and 40,000 flyers per hour.

The expansion of CAH further bolsters the state-of-the-art security system with almost 200 CCTV cameras, X-ray equipment and an access control system.

Key automated features of the facility include a bank of singulators which arrange parcels into single queue, six-sided camera scanners which scan all sides of conveyable shipments, and a shoe sorter matrix which directs the shipments to the relevant chutes according to their destination.

The CAH has also been a test-bed to pioneer new operational processes for DHL and has the ability to sort down to the individual postal codes of the DHL service centers in destination countries eliminating the need for the flyers to be resorted at the destination Gateway.

With the service extension, DHL says it can offer express door-to-door delivery to over 20,000 postal codes across Asia Pacific by noon the next business day for intra-Asia shipments.

Expected to be completed in 2010, the North Asia Hub (NAH) in Pudong, will complement the CAH in Hong Kong and deliver further operational efficiencies by leveraging its geographical proximity for shipments destined for the region.

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