DHL deepens its long-term commitment in Korea
Commits US$50 million to further strengthen its extensive network infrastructureSingapore, 11/09/2006, 10:30 AM CET
DHL, the world's leading express and logistics company, today announced that it is committing US$50 million in South Korea for capacity expansion and service capability enhancement. This latest investment brings DHL's total investments in South Korea to US$68 million, up from its current US$18 million, since 2001.
The bulk of DHL's latest investment will go into expanding its current DHL Express facility at Incheon Airport. DHL will also invest in the upgrading and expansion of its service centers, including technological innovation and more than 100 new vehicles, in South Korea.
DHL's investment plan complements the South Korean Government's vision of establishing Incheon as a preferred logistics hub to serve the region. According to the Ministry of Construction and Transportation, the volume of air cargo between South Korea and the neighbouring region has shown significant increase, especially freight movement between South Korea and China. The total volume of air cargo between the two countries has seen an average increase rate of more than 30 per cent over the five years since 2001.
"Our commitment to South Korea is largely driven by customer needs arising from a steady flow of trade volumes into and out of South Korea," said Scott Price, CEO, DHL Express - Asia Pacific. "We are confident that our robust network infrastructure, as well as our upgraded facilities, will not only serve the increasingly sophisticated needs of our customers, but will enable us to actively enhance our role as a trade facilitator to improve trade links between South Korea and the rest of the world."
Proposed expanded facility
The existing DHL Express facility in Incheon is operating beyond capacity as trading volumes increase. DHL has to expand the existing 2,000 square meter facility to meet projected growth estimated by Incheon International Airport Corporation at 7 million tonnes of air cargo by 2020.
Under plans currently being reviewed by the South Korean Government, DHL will be relocating to a state-of-the-art airside facility adjacent to the foreign carrier's airside terminal. The proposed multi-level building will cover a gross floor area of 16,500 square meters, occupying approximately 8,100 square meters of the 20,000 square meters of land on offer to DHL. The remaining land area will provide the needed capacity for future expansion and growth based on business imperatives and industry demand.
The new facility will have the capacity to handle approximately 500 tonnes per day, and triple the sorting rate for conveyable shipments to 8,000 items per hour, up from the current 2,500 shipments per hour. A new automated material handling system will also be implemented, which will improve operational capability. The airside location will provide direct ramp access to both DHL and commercial aircraft, thus reducing lodgement and recovery times of shipments to and from aircraft, resulting in the ability to process greater volumes in shorter time spans.
Other investments to boost network infrastructure
In addition to the proposed Incheon expansion plan, DHL's extensive infrastructural development plans involve the consolidation of existing service centers and upgrading of other facilities to offer customers enhanced operational and service capabilities.
The investment covers technological enhancements, including the implementation of highly advanced logistics equipment to provide customers with faster and more accurate services, as well as security systems that have passed the certification audit for Transport Standardization Program (TSP) and Technology Asset Protection Association (TAPA). The Service Centres in Gimpo Airport, Kangbuk, and Gyeongseo are TAPA-certified. The highlight of the technology investment is the enhancement of the Quality Control Centre (QCC), an advanced technological system for real-time shipment monitoring and delivery management in both Kangbuk and Gyeongseo.
Another recent key DHL investment in South Korea is the upgrading of DHL's Service Centre in Pusan to better serve the southern city. The expanded Service Centre now has a total land area of more than 1,220 square meters for warehousing and operational purposes. The QCC function has been implemented in the Service Centre to provide better delivery management. Other new facilities that have been inaugurated in 2006 include service centres located in the districts of Gyeongseo, Seocho, Daegu and Sacheon.
DHL has an unrivalled network infrastructure covering 85 facilities across South Korea, providing customers with better reach and transit time.