DHL's new express centre to see first cargo next month

PUBLISHED : Tuesday, 11 May, 2004, 12:00am
UPDATED : Tuesday, 11 May, 2004, 12:00am

Asia's No1 courier fine-tunes operations at the Chep Lap Kok facility as it gears up for the launch of US$100m regional hub

The first pieces of high-value cargo are expected to move through DHL's Chek Lap Kok express centre next month as the company fine-tunes operations at the new facility and gears up for a late-summer launch for its US$100 million central Asian hub.

DHL Express chief executive Uwe Dorken said the centre and the six medium-sized freighters it bought with partners to service the hub would significantly raise the amount of time-definite cargo in Hong Kong as Asia's No1 express firm built its intra-Asia network.

'The freighters we will be bringing on stream will double our capacity compared to the passenger fleet network we are using right now,' Mr Dorken said. 'That will automatically suck a lot of cargo into Hong Kong because [the infrastructure] is fixed here and we are going to fill it. We have locked in that cost and now we have to put the volume into it. It is on schedule and on budget.'

DHL leases aircraft overnight from Cathay Pacific Airways to serve regional markets such as Osaka, Taipei, Seoul and Singapore.

In March last year, Air Hong Kong, a pure freight carrier in which DHL owns 30 per cent and Cathay 70 per cent, bought six Airbus A300-600Fs to service the hub.

'The Air Hong Kong joint venture allows us to transfer [the Cathay night-flight] schedule on to a dedicated and economical network of full freighters and significantly increase our capacity,' he said.

The first of the freighters is scheduled for delivery in September; the last will arrive in March, according to Air Hong Kong.

The leased Cathay aircraft would slowly be phased out of DHL's core intra-Asia routes as the freighters arrived and some would be transferred to develop emerging markets, Mr Dorken said.

The hub will draw on regional mainland cargo from the Pearl River Delta to Shanghai and beyond.

'Most of the intra-Asia cargo for Shanghai will go via Hong Kong after the launch,' Mr Dorken said. 'China is the most dynamic market in the region. We have seen 30 to 40 per cent growth there in the past three to four years.'

The company's pure international express revenue eclipsed US$300 million last year, he said, adding that represented roughly 40 per cent of the market.

Add on revenue generated by associates DHL Danzas Air and Ocean and DHL Solutions and mainland sales passed the US$500 million mark last year.

'Our China express revenues represent only that business billed in China. Some of our competitors generously add revenue billed in America. We don't do that,' Mr Dorken said. 'We have that revenue too but we don't add it to our China numbers.'

Deutsche Post, DHL's parent, will next month try to raise as much as Euro2.5 billion (HK$23.05 billion) through an initial public offering in Germany, where it will put up to 49.9 per cent of its wholly owned PostBank up for sale. Proceeds will be used mostly to fund expansion in logistics and mail operations.


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