With air cargo traffic in Asia growing continuously, DHL Express will set up a new facility in Singapore in the first quarter to complement its Central Asia Hub in Hong Kong
DHL Express will open a new fully automated facility in Singapore with an investment of 85 million Euros (US$96 million) in the first quarter to complement its Central Asia hub in Hong Kong. “We rely heavily on Europe and US. But Asia has been growing continuously. And so within the first quarter we will be opening our new facility in Singapore,’’ said DHL general manager of the Central Asia Hub, Tony Khan. “That will provide the Central Asia Hub more support to expand its volume. We are really growing here so I need relief to bypass some of the cargo,” he added. DHL is keen on growing its Central Asia Hub but faces three hurdles – parking slots, land and employment. “We operate an average of 17 dedicated network aircraft every night. The challenge comes when we want to bring in additional flights,’’ said Khan. “Maybe the parking slots are available but not in the timings that we want. It is a challenge faced by us but that will be addressed with the third runway. I am really looking forward to that. “With the two runways we are very productive, with the third runway I am sure we will have more growth.” Khan continued: “The airport authority has developed 28 parking slots in the West Apron expansion so hopefully some of the airlines will get diverted there providing us more parking slots. But I need parking slots here in the cargo area, if you give me further that will affect my productivity and connectivity.” Landside Turning to the issue of land, Khan said: “Land from the airport is available. But I have to see how I can make the best use of that. We prefer land that is adjacent to the hub but that is very limited because of the parking. So this is really a challenge.” The biggest challenge for the Central Asia Hub is employment. “Because the airport is a long distance from the city and due to the overnight shift, we find it difficult to lure staff, particularly frontline employees, even though we offer a handsome package with lots of benefits, including training for staff,’’ said Khan. Expanding on training to staff, he said, “For example, if you look into our senior management, most of the people started from the floor so that is the opportunity we give to our staff. So if you join us at the ground floor and if you are really determined to go up we will give you all the support and training and we can take you up. “In Hong Kong there is no shortage of talented staff. I ask for one with a master’s degree and I get a few with a master’s degree. I don’t have this problem here. The problem is getting blue-collar workers.” DHL Express was last year declared by leading human capital organization Top Employers Institute as the top employer in Hong Kong for achieving the highest standards of excellence in employee conditions. DHL also bagged another 14 accolades in Asia Pacific, including the “Aon Hewitt Best Employer Asia Pacific” 2015, which is given to companies who have won Aon Hewitt awards in at least three countries across the region. Belly Cargo DHL has been capitalizing on the recent surge in belly hold cargo. DHL cargo is carried in the belly hold of 64 passenger aircraft daily. But the daily 17 dedicated network flights by DHL aircraft, Air Hong Kong, Polar Air and Aerologic, still account for the majority of DHL’s tonnage. DHL’s major destinations from the Central Asia Hub are Europe, the US and Asia followed by the Middle East and Africa. Four flights a day go to Europe and the US with bigger freighters. DHL Express also has daily flights to Japan, Bahrain, and main hubs in Asia, such as Singapore, Korea, Vietnam, Thailand, Indonesia, Malaysia and Taiwan. DHL Express chose to set up its Central Asia Hub in Hong Kong because of location and night flights. From Hong Kong it is only a four-hour flight time to any destination in Asia and there is no night flight ban. The DHL Express facility was launched in 2000 at a total cost of US$210 million. In June 2011, DHL doubled the size of its facility to 35,000 sq m and it could handle up to 40 million shipments annually. The expansion saw a further investment of US$110 million. The highly sophisticated and fully automated facility now has a throughput of 75,000 pieces per hour of flyers and conveyable shipments, an increase of 114 percent compared to the 35,000 pieces per hour throughput capacity before the expansion. Asked if the China slowdown in 2015 had effected DHL Express’ operations at the Central Asia Hub, Khan said: “It did not affect the Central Asia Hub because DHL does not solely depend on China. We have invested very heavily, not in terms of money only but in services as well, in many Asian countries, for example Vietnam. China numbers were down but other countries in Asia, Middle East, Europe and the US picked up the slack and made up the numbers for the Central Asia Hub. “Somewhere the volumes are down, somewhere they are up, because logistics is a business where the goods will keep moving, ‘’ Khan said. “The day the whole world slows down that is the day I will start worrying.” The Central Asia Hub is the growth engine for DHL’s virtual network in the region with Intra-Asia playing a major role. For DHL Express, China remains the key sector where it has a strong hold with a countrywide network. China’s economy is continuing to grow, albeit at a slower pace. “The middle class is driving the Chinese economy,’’ said Khan. “Growth in any country leads to more travel. When people start making money they travel and when they travel the goods also move. Travel and logistics go hand in hand.” Asked the reason for DHL’s success, Khan explained: “People always talk about thinking outside the box. In DHL we encourage people to think inside the box. We believe what’s inside the box is more important than anything else. “We are not only an express company but we are also a solution provider. We carry someone’s dreams inside the box, someone’s wedding rings, someone’s wedding dress, university application or even lifesaving drugs. That’s the mindset we infuse into our employees. “We have a culture that gives DHL and its comprehensive network an edge in service compared to other carriers. It is called ICCC, Insanely Customer Centric Culture. “For example, a customer one day called me and said she had a problem with a package and wanted it to be delivered overseas quickly. A DHL courier was at her door in 15 minutes. This is what makes us stand out in service compared to other carriers.’’