The Deutsche Post Express pillar has launched operations at its newly built distribution and sorting center at Cologne/Bonn Airport (CGN). The doubling of its warehouse space from 7,500 m² to 15,000 m² reflects the rapid growth of DHL’s volumes destined to Cologne and the neighboring regions. This step also evidences the management’s new policy to broaden and fine-tune its traditional hub and spoke policy.
Up until the end of September, DHL operated four flights per day/night between its two global hubs Hong Kong and Leipzig/Halle. An additional service operated by a B777F was introduced at the end
of October, linking HKG with CGN four times weekly and arriving in CGN during daytime.
The reason for targeting CGN instead of LEJ is simple and based purely on commercial reasons, Travis Cobb, EVP Global Network Operations, explains: “There is sufficient and fast increasing local market demand for e-commerce products in the Rhineland and the surrounding regions, justifying the new CGN routing.“ The manager adds another premise: “Trucking is, in relation to air transportation, on rather short distances 1/8th cheaper than transiting the packages by feeder aircraft from Leipzig to Brussels or other central European destinations.“
Serving markets faster
Other routes have been affected by the network adjustment as well. A B777F trans Pac flight operated by DHL’s partner Southern Air formerly linked DHL’s global hubs Hong Kong and Cincinnati, but now flies to New York (JFK) and Chicago (ORD) since 1st October. Mr Cobb comments: “Thanks to this network adjustment, we can better and faster serve the greater New York area including the bordering regions as well as Ohio and the nearby local consumer markets.”
DHL’s changing intercontinental hub network, serving airports that previously were not amongst its hotspots, is also evident in its investment strategy. It poured €70 million into Miami to enlarge and enhance its facility, going live in June of 2021. In Milan Malpensa, it will have invested €109 million by June 2020 for the same reason. In Paris-CDG, €170 million will have been spent on a sorting facility by mid-2021, and Copenhagen can also expect to see a €147 million investment within the next two years.
On way to becoming faster and more agile
Hence, viewed from this angle, the €123 million spent in Cologne/Bonn‘s sorting center is in line with DHL Express’ general strategy to become more agile through a more fine-tuned intercontinental network, closely integrating sub-hubs such as Chicago, Miami, Milan or Charles de Gaulle in its global air and distribution services.
Back to its most recent Cologne/Bonn project: Here, state-of-the-art-technology allows the integrator to process up to 20,000 shipments per hour. Vacuum lifters, capable of swiftly moving packages weighing up to 50 kgs, help staff by making work less physically demanding. Solar panels on the roof, an innovative heating and cooling system based on an underground tank filled with 1.3 million liters of water, and its 18 km pipelines ensure coolness in summer and a warm ambience in winter for the 340 staff working in the facility.
DHL’s commitment is an important economic factor, says Vanneste
"DHL Express' investment in the Cologne/Bonn location is a great confirmation of the relevance of our airport among the important international freight hubs. The commitment of major customers such as DHL Express not only strengthens the airport itself, but also has a decisive impact on the airport as an economic factor. The entire region benefits from this,” says Johan Vanneste, CEO of Flughafen Koeln/Bonn GmbH.
The executive went on to say: “We are particularly pleased with the environmentally friendly technology used in the new logistics center. Innovative systems such as the iron energy storage system, which provides the building with environmentally friendly air conditioning, help us to achieve our climate targets."
CEO John Pearson of DHL Express responds that “our new Cologne hub is entirely emissions free, testifying DPDHL’s commitment to a sustainable policy that all decisions and investments are based on.“ Pointing to his company’s “Strategy 2025“, the executive adds that all data indicate that the growth of e-commerce will accelerate further despite some current political hiccups and tariff issues. Having said this, Mr. Pearson exclaims that international time definite shipments remain DHL Express’ profitable core business, accounting for a global market share of 39%, followed by FedEx (30%) and UPS (22%).
To stay on top of the pack, customer centric services, faster transit times based on digitalization and an overarching customer centric culture are the cornerstones of the integrator’s B2B and e-commerce mid-term strategy. Loyal and motivated staff as well as best-in-class margins round off the target set for the years ahead.
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