November 17, 2016

DHL Express to invest $185 million to handle e-commerce growth

Spending in 2016 and 2017 to expand hubs, create 900 jobs, equip couriers with mobile scanners.

By DC Velocity Staff

Shipping and logistics provider DHL Express will invest $185 million in its U.S. operations during 2016 and 2017 in an effort to meet continued business growth and growing e-commerce volume in the country with additional infrastructure, technology, and people, the company said Wednesday.

The initiative will create some 900 new jobs in 2016, and the company has already rolled out new "smart" scanners that equip DHL couriers with voice and GPS capabilities as well as stop-by-stop sequencing and turn-by-turn navigation. DHL will also expand its plans for growth in other countries in the region, with new investments in its operations in Mexico, Canada, Brazil, Chile, and Peru.

One sign of that growth is DHL's forecast for a 12-percent volume increase year over year during the 2016 holiday season, triggered in part by a strong U.S. dollar that encourages consumers to shop abroad for holiday gifts and boost demand for import volume. The projection is similar to rival UPS Inc.'s prediction of a 14-percent increase in seasonal global delivery volume over last year's peak.

However, DHL's growth prediction extends beyond seasonal holidays such as Christmas and Mother's Day, as the proportion of global e-commerce volume in its total business has risen above 20 percent, up from about 10 percent in 2013, the company said. In response to those trends, DHL plans to leverage the global B2C e-commerce market for cross-border shipments, which is expected to grow in absolute terms from $400 billion today to a total global volume of $1 trillion in 2020.

The company has already completed a portion of the $108 million investment project at its Americas Hub, located at the Cincinnati/Northern Kentucky Airport, which was announced last year. Two weeks ago it opened the North Ramp expansion, dedicating 45 acres of land to provide parking space for 16 additional planes each night and adding new storage and warehouse space for ramp equipment and shipping containers. Coming next year will be additional automated sorting capability and 40 new reload positions that will enhance the hub's efficiency to handle the growing e-commerce volume seen in the Americas.

Future spending will include $20 million over two years to upgrade and expand the company's ground fleet, adding more fuel-efficient vehicles, including fully electric vans and electric forklifts, at its JFK airport facility in New York.

DHL will also spend nearly $60 million to deal with growing shipping volumes by expanding and adding facilities and by providing technology and security upgrades and new equipment such as the courier scanners. That effort has already added three new service centers in New York City, Chicago, and Seattle, and includes plans to expand its Los Angeles gateway (completed in 2016), add a new gateway in Chicago, and refurbish its JFK gateway in 2017, adding a new, improved automated sort system that will facilitate earlier morning deliveries in the New York market.

"Going forward, we will continue to keep our focus on the last mile, leveraging technologies and solutions that provide added convenience for customers," Mike Parra, CEO of DHL Express Americas, said in a release. "This approach focuses on convenient pickup and drop-off options, proactive notification, and flexible delivery solutions. We are also reconfiguring delivery routes to handle more afternoon deliveries due to an increasing number of shipments going to residential customers, in part due to increased e-commerce volume."

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