DHL opens new domestic transportation hub in Shanghai

•  Facility is part of DHL’s US$25 million investment in Kangqiao
•  Expands its hub and spoke network to strengthen domestic road transportation services

Shanghai: DHL, the world’s leading logistics company, today opened its new DHL Eastern China Domestic Transportation Hub in Shanghai, as part of a US$25 million investment that strengthens DHL’s expertise in the domestic road transportation and distribution market in China, and taps on the growth of the domestic road industry.

The domestic market in China has been growing strongly due to improved purchasing power of the local population. Total revenue from the domestic road transportation industry in China rose 66% between 1998 and 2007, from US$15 billion to US$25 billion, and it is projected to reach US$36 billion by 2013 at an annual growth rate of 7.1%1). The Chinese government has also recently released a roadmap for developing Shanghai into an international shipping center. This is expected to boost demand for domestic transportation services in order to deliver goods from inland production bases to the ports and airports, as well as distributing imported goods to end consumers in the cities.

“The launch of the DHL Eastern China Domestic Transportation Hub in Shanghai reflects our continued confidence in China and commitment to be the best integrated logistics solutions provider,” said Frank Appel, Chief Executive Officer, Deutsche Post DHL. “We are confident that this new hub will enhance our competitive edge in managing domestic transportation and distribution, enabling DHL to continuously meet and exceed our customers’ expectations.”

Situated at the Kangqiao Industrial Park, the heart of the fast-growing Pudong area, the DHL Eastern China Domestic Transportation Hub is one of the five regional hubs2) owned and operated by DHL Supply Chain in mainland China. Together with another 15 sub-regional hubs3) across the country, the DHL Supply Chain domestic transportation network now covers more than 400 cities in China.

The 25,000 sqm new hub houses 53 loading and cross docks and operates around the clock to provide cross dock operations, storage, multi-modal transfer and data management for customers. The facility also houses the fleet control centre and customer call centre. The hub is located within the DHL Supply Chain Kangqiao Logistics and Transportation Center which provides value-added warehousing and distribution services.

”With a well established hub and spoke network, and a fleet of 1,500 vehicles, DHL provides a full suite of domestic services in China. This includes national line-haul services, inter-regional distribution and inner-city delivery services,” said Paul Graham, Chief Executive Officer of DHL Supply Chain Asia Pacific.

Advanced cross-dock operations in DHL Eastern China Domestic Transportation Hub

The DHL Eastern China Domestic Transportation Hub features advanced cross dock operations and IT solutions to enhance the service capabilities and offerings. Cross dock is a supply chain solution designed to help DHL customers combine shipments in transit from different locations or reconfigure single shipments into multiple ones. It involves the transfer of goods from inbound vehicles directly onto outbound trucks with minimal or no requirement for warehousing and storage between them. In the process, shipments can be repackaged and distributed in transit according to specific requirements, and also enables the consolidation of material from different sources where they are bound for the same destination. Currently, the hub can handle 262,000 tons of shipments per year through its cross-dock operations.

Cross dock solutions are used across a wide range of industries but they are especially well developed in the Retail industry, and used extensively by international retailers around the world. The solution is preferred as it reduces handling and storage costs, and increases the speed at which customers can receive their products.

The cross dock solution is backed by iTransport, an advanced IT system that DHL deploys across the Asia Pacific region. The robust system helps DHL’s customers with route and network design, fleet management, shipment tracking and order fulfillment. Catering to local customers, the system operates in both English and the local Chinese language and is designed to enable electronic exchange of data with customers’ systems.

“With over 25 years experience in domestic transportation and distribution services, DHL has the expertise and capabilities to contribute to China’s plans to develop Shanghai into an international shipping center. China is a fast growing economy with a large domestic consumer market that is of strategic importance to the company. The opening of the domestic transportation hub in Shanghai signifies our support for the government’s roadmap for the city. Having built a strong operational base in China, we remain committed to providing the best-in-class domestic transportation solutions for our customers through continuous investment in people, infrastructure, systems and processes,” commented Victor Mok, Executive Vice President, Greater China, DHL Supply Chain.