DHL immune to Asian drop
04 / 10 / 2011
AT a time when rivals FedEx and UPS are seeing demand wane it is business as usual at DHL Express.
The company does not plan to cut capacity, Larry Rosen, chief financial officer of DHL parent Deutsche Post, said. In fact the company is expanding its network, half of which starts or ends in Asia, where DHL Express is the largest cargo delivery company.
During August the Association of Asia Pacific Airlines (AAPA) reported cargo traffic (freight tonne kilometres) was down 5.8 per cent against the year before. Cargo load factor fell 3.1 per cent to 64.5 per cent for the month.
FedEx recently warned of a dip in demand from Asia, which began in July. Consequently the US integrator cut capacity amid weak orders from sectors, such as consumer electronics.
Hong Kong, home to the world’s largest cargo airport, has seen double-digit declines in cargo traffic compared with last year.
DHL has found a survival mechanism in its business mix, protecting it from such falls. The player has a more extensive intra-Asia business than FedEx and UPS, both of which are more focused on longer-haul routes from regions to Europe and North America.
Deutsche Post also provides warehousing and logistics support.
“We haven’t seen a slowdown in the volumes moving through our warehouses,” Rosen said. Electronics, fashion and life science-related businesses are all holding up, he added.
A new hub in Shanghai (China) is due to open next year alongside the Hong Kong facility, supporting the westward march of China’s economic expansion. DHL is also replacing older aircraft.