Covid-19 has brought DHL Aviation’s Brussels hub a larger-than-forecast growth rate, leading to ad-hoc capacity expansion and a direct weekly connection to Hong Kong. The creation of smaller sub-hubs like CDG is another way to enhance flexibility and efficiency, says Public Affairs Manager Freek De Witte (FDW).
Even after the relocation of the intercontinental hub function to Leipzig in 2008 Brussels is still the third largest DHL hub in Europe, ranking 5th worldwide. Even before the pandemic, the Brussels volume had already outpaced the numbers it handled prior to the move, says Mr De Witte, but Covid-19 has brought its own challenges. After a first dip in the volumes, we soon realized that our hub, inaugurated in 2017 to accommodate a growth rate of 8% for the 10 years to come, was already getting too small. 1.5 years of Corona have resulted in growth rates of 15 to 20%.
CFG: The reasons being?
FDW: Vaccines, of which we flew some 153 million ex Brussels, primarily to South America, Asia, and Australia.
Secondly, the on-going growth in e-commerce. The rate we had forecast for the next 10 years has already manifested itself in the 1.5 years of the pandemic. “Even if we expect this to slow down, it will never go back to the pre-Covid pace.
Thirdly, there are the problems in container shipping, which may even grow worse when ships will be forced to ‘slow sailing’ due to the new environmental regulation introduced by the International Maritime Organisation. Even today we see a lot of shipments being diverted from the ocean to the air mode. In some consignments ocean rates are going up. This reduces the price gap with air cargo, which can offer better reliability. Due to the combination of these three factors, on some days we are reaching the limits of our capacity, especially on routes ex Far East.
CFG: Do you have room for expansion?
FDW: Since early October we have leased the Brucargo building 701, which will partially accommodate meeting and training rooms and the warehousing capacity can free up some space at our hub. We are also looking at the disused former FedEx building next to our hub, of which we already use the parking space, and the abandoned building of Lufthansa Technik.
CFG: Could these capacity constraints lead to flights being diverted to Leipzig or Cologne?
FDW: Not at all. There are no network adjustments whatsoever.
CFG: DHL Aviation has also expanded its Paris-CDG operation. Won’t that cannibalise the Brussels hub?
FDW: CDG will not have the size of BRU. It is part of a network of secondary hubs such as Milan-Malpensa. The aim of these sub-hubs is to be able to shift some volume and to always maintain flexibility and resilience.
CFG: What else did you learn from Covid-19?
FDW: The basic philosophy is that you need good staff and then quality will follow. What we have learned is precisely the value of the flexibility of having these sub-hubs. We are also looking into Amsterdam. In Germany all customs clearance is concentrated at Leipzig, so we are considering building up some competence in Cologne. Covid-19 has enabled us to detect some weaknesses in our network.
CFG: Which destinations do you offer from BRU?
FDW: Intercontinentally, flights to and from the U.S. rank first. During the pandemic we even flew to Vancouver, JFK, Miami and of course Cincinnati. Today the latter has remained, as well as Miami. We fly to Lagos, Tel Aviv and, since 21 October, to Hong Kong, to ease Cologne and Leipzig. During the pandemic we even used TUI passenger aircraft for belly transport to Leipzig and East Midlands.
As for Europe, we have 27 flights per day. Apart from East Midlands and Leipzig there are Barcelona, Madrid, Toulouse, Milan, Porto, and Budapest. We are operating more flights using ad-hoc slots that are not used by passenger flights currently.
CFG: Will we see the electric aircraft in Brussels?
FDW: We plan to have 1 in Brussels by 2024. They are part of the groups’ policy to become CO2 neutral by 2050. As a market leader we are compelled to take the lead. Our customers as well as our younger staff and our investors demand this. Currently, some 62% of all the emissions within DP-DHL come from aircraft. This share must be reduced.
CFG: You also take third-party volume. What is the ratio?
FDW: On some routes it is quite substantial, like Lagos. In our aircraft you will find three types of cargo: our own; volume generated by other companies within the group and commercial from other forwarders and shippers. The Belgian Post BPost is an important customer for intercontinental consignments.
Marcel Schoeters in Brussels
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