DHL Express heralds major $360M investment in the Americas region

Global express delivery and logistics services provider DHL announced earlier this month that it is spending more than $360 million between 2020-2022, in an initiative focused on building new and expanding existing facilities in the America’s region, spanning the United States, Canada, Mexico, South and Central America and the Caribbean, coupled with investing millions of dollars into its Americas air network, for things like the introduction of new direct flight routes.

DHL officials said that these investments are largely driven by both B2C and B2B e-commerce shipment growth, where the Americas countries experienced, on average, 33% more shipments per day in Q1 2021 annually.  And in the U.S., DHL said shipment volumes were up 41% in Q1 2021 vs. Q1 2020.

The investment for these infrastructure investments is allocated for various projects, including:

• an expanded state-of-the-art hub in Miami, which will be the 6th-largest DHL Express hub globally by Time Definite International (TDI) volume;
• a 244,000 square-foot automated hub in Hamilton, Ontario;
• new service centers and upgrading existing facilities throughout its regional network to support first- and last-mile pickup and delivery operations;
• 105 self-service kiosks in Mexico to support to Time Definite Domestic (TDD) market to support first and last mile shipment processing; and
• the upgrading of hubs and gateways with state-of-the-art automation in Mexico City, Guadalajara, and Monterey, as well as service centers expanded in key Mexico-based markets, among others

What’s more, DHL said that these new investments will increase volume capacity in the DHL Express Americas network by almost 30% by the end of 2022

Logistics Management Group News Editor Jeff Berman spoke with DHL Express Americas CEO Mike Parra about these investments. Their conversation follows below.

LM: What are the biggest benefits of these investments for DHL's shipper customers?

Mike Parra: Number one, we expect improvement in pickup and delivery times, with later pickup cut-off times and earlier delivery times. Not only since we are adding new service centers, and new PUD times, we are aiding and assisting throughout our network. As an example, here in south Florida, in less than 60 days we are going to be opening up a brand new service center in Ft. Lauderdale, so we are going to spread out 60-to-70 routes from our Doral service center in Miami east up into the Fort Lauderdale area, which adds another service point and gets us closer to both the pick-up and delivery areas, which is what we call a centroid [DHL defines a centroid as a location where the majority of pick-ups, deliveries, and customers are located]. That alone is going to improve our deliveries in that area, and we will be delivering anywhere from 30 minutes to an hour earlier while we are picking up anywhere from 30 minutes to an hour later. That is an example of what is happening, and that is happening across the board, whether it be in Canada with the expansion of our new Hamilton Gateway or whether it be investments that we continue to make in Mexico, where we are expanding our self-service kiosks, our retail points, and the upgrading of our gateway in Brazil. It is really across the board. In essence, what you get is ultimately an increase of our network capacity by 30% more through the end of 2022.

LM: What will these investments bring that was missing, needed, or lacking? 

Parra: For the Americas, much like our competitors, we have seen significant growth in B2B and B2C e-commerce, and we have seen 33% more shipments per day in the past quarter versus the previous year. What we are doing is, as a result of that, it is going to result in additional new jobs across the Americas. Alone in the U.S., we are going to be adding more than 2,600 new jobs throughout 2021, and we created 3,000 new jobs in 2020 alone. The breakdown for that is 1,100 new jobs at our CVG hub (Cincinnati-Northern Kentucky), with the rest throughout the U.S. by creating and adding jobs throughout the region, whether it be the Hamilton gateway and the new Miami hub expansion. We have been adding jobs, really, for the last six years. When I took over at the end of 2014, early 2015 as CEO of the Americas, we had 14,000 employees in this region. Now six years later in 2021, we have 30,000 employees in this region for DHL Express. That is 16,000 new jobs over the last six years across the entire Americas region, from Canada down to Argentina, with the majority of those jobs in the U.S.

LM: What are the main competitive advantages of these investments from a DHL perspective?

Parra: Our international presence globally, being in 220 countries and territories around the world and truly being owned and operated in those locations is a competitive advantage for us. And these investments have allowed us and will allow us to add additional capacity for both aircraft and facilities and new jobs in the U.S., Canada, and Mexico, with additional flights and also increase capacity for non-conveyable shipments and non-conveyable long-haul lanes that we have, as well as additional weekend flight support that is going on, specifically for each of these markets. We have also added daytime flights into our Latin America network throughout Central and North America, as well as Central America period. We have also put on additional flights to Brazil from New York and CVG and will put on a direct flight out of Miami into Chile, which starts in September, as well as a dedicated flight that we have. And since 2019 we have been adding 14 Boeing 777s. And we are going to take the option to buy another set of seven-to-eight additional 777 aircraft between 2022 and 2024. A lot of that goes into these investments and what it does for us is it puts us in a position in which over the course of the pandemic a lot of ocean freighters were either stuck or parked temporarily. There are still a lot of global aircraft that are not flying, and we were able to step in and fill that gap, using these investments to provide appropriate air capacity for our customers to move their products from one point to another.

LM: What are the next steps, related to these investments, post-2022?

Parra: We have an investment plan laid out to 2025. We are not yet specifically disclosing them, but there are going to be some sizable large investments, which will predominantly be in the U.S. They will be key strategic investments that are going to add more jobs and bring us closer to market, add additional flights and add increased capacity. That is what I would say is going to happen between 2022-2024. The [spend] figure we announced for this initiative will probably be almost two-fold between 2022-2025.

LM: When will the Hamilton and Miami facilities be open?

Parra: The Hamilton facility is up and running already, and the Miami facility is up and running, with construction completed probably in the next few weeks. The Hamilton facility is 244,000 square-feet and is three time bigger than the facility we were in. And in March 2022, we are opening a fully automated gateway—we call it a hub—in Atlanta. That is going to help us, because we are also going to connect into Europe from there. We are already connecting into Atlanta via New York, and we will be doing Asia as well. Atlanta is a great centroid for us, a great big market with Delta and good commercial airlift into that market, and we can truck within eight hours of Atlanta to many of our key markets. We are also opening up owned and operated DHL retail points in Central and South America in Chile and Colombia and across the region. Back here in the U.S., we have put up these really neat pop-up retail stores in strip malls, where stores have been relocating or downsizing, to offer customers to conveniently drop in and drop off or pick up a shipment, they are also drive through and contactless. There are solar panels on the roof and are eco-friendly for the environment. It is just a great addition to our brand and helps us get closer to the market and our customers.