DHL’s business unit, Supply Chain, announced that it is investing €500 million until 2028, in the countries located between the Rio Grande, parting the U.S. and Mexico and the Archipelago of Tierra del Fuego in the Patagonian region of Argentina. The funds will be distributed based on clear geographical and thematic priorities. They are aimed at strengthening the logistics company’s operations in Latin America, optimizing the domestic infrastructure, and supporting automation and sustainability initiatives.
The move to putting the spotlight on Latin America has been triggered by the global trend of omni-sourcing, with DHL Supply Chain cementing its strategy to invest into emerging markets and fast-growing economies. The many sub-markets in Latin America are ideal for this intention, especially since they have strong linguistic and cultural similarities, with Spanish and Portuguese as the dominant national languages. Mexico and Brazil are the engines of development, but Colombia, Chile, and Uruguay are also playing an increasingly important role. The investment scheme is part of DHL Supply Chain’s strategic plan to further strengthen logistics capabilities in high-demand sectors, such as: healthcare, automotive, technology, retail, e-commerce, among others.
Broad range of activities
The focal points of DHL Supply Chain’s LATAM initiative target the decarbonization of the company’s domestic fleet through greener alternatives; building, developing, and retrofitting its real estate assets and warehouses in the LATAM market; as well as channeling significant funds into new technologies, robotics and automation solutions intended to improve workplaces. This goes hand in hand with making operations more effective, flexible, and resilient for customers, the company states.
Investing in multiple source points
Announcing the strategy, Oscar de Bok, Global CEO of DHL Supply Chain, exclaimed: “Companies all around the globe are looking for more diversified sourcing and supply chain strategies by bringing stock points closer to their production and sales markets. Therefore, we see increasing demand for logistics support in Mexico, Brazil, and the other strategic markets in Latin America. That trend of investing in multiple source points closer to the large sales markets - which we call omni-sourcing - helps industry customers to build more resilient, robust, and flexible supply chains to better cater to the needs of their end customers. That is why we are strategically investing in our logistics infrastructure in Latin America and those geographies that are strategically located and equipped to play a vital role in global trade.”
Mr. de Bok’s statement implies - even if not mentioned explicitly - a turning away from China as a preferred partner for sourcing goods. Other companies pursuing a similar investment strategy, call this reshoring, China-plus strategy, or near-shoring, depending on the focus of their individual business activities.
“THE moment for Latin America”
This Latin American focus complements DHL Supply Chain’s long-standing history of strategic investments, acquisitions, and partnerships in the vast region. Not only the geographical proximity to major consumer markets in North America make the large area a springboard to accelerate further growth, also the booming sales markets make it attractive for industries to invest and therewith request additional logistics support.
Agustin Croche, CEO in DHL Supply Chain Latin-America, said: “At DHL Supply Chain, we are more than 40,000 people in this region and each of us is a unique link that contributes positively to the industry, supporting each of our clients with whom we always seek sustainable growth and long-term relationships. This is THE moment for Latin America, and we must take advantage of it.”
After rolling out the future investment scheme, Oscar de Bok and Agustin Croche inaugurated a new Center of Excellence for Electric Vehicles. The mission of this new EV center is to provide synergy to the automotive industry in The Americas.
Mustafa Tonguç is new MD of DHL Express, Germany
Prior to the LATAM announcement, sister company DHL Express had appointed Mustafa Tonguç as Managing Director Germany. He succeeds Markus Reckling, who has moved to a role in the Divisional Board of Post & Parcel Germany. “Mustafa Tonguç has achieved a number of successes in his many years with the Group,” said John Pearson, CEO DHL Express. “These include, most recently in Turkey, the implementation of a state-of-the-art operational infrastructure and the improvement of service quality. This has been particularly visible with the opening of one of the most technologically advanced DHL Express sites at the new Istanbul airport. In addition, thanks to Mustafa Tonguç's leadership, the Turkish sales team has achieved a major commercial turnaround, transforming Turkey from a volume-driven mindset to one of the most profitable countries in Europe.”
In his new position, Mustafa Tonguç reports to John Pearson.
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