DHL Express has made a significant addition to its network with the expansion of its hub in Paris. The company has grown its existing Paris-Charles de Gaulle ten-fold at a cost of €170m. DHL asserts that it is now the largest facility of its type in France, so presumably, it is larger than the FedEx facility also located at Charles de Gaulle.
DHL Express comments that the new facility will “strengthen DHL’s foothold in France” complementing the further €80m the company has invested in its French network over the past six years. The company describes the facility as having “extraordinary processing capacities” with an “ultramodern sorting system” which cost €45m and that “its processing capacity is 38,000 pieces (parcels and flyers) per hour, 15 times more than the previous facility”.
France is an idiosyncratic market for Express, with a number of strong national players including La Poste. However, in the past, DHL Express has sought to concentrate on international services that command a premium, a segment of the market where DHL Express has considerable pricing power. Therefore, it is likely that DHL is not so much looking to build its presence in the domestic French market as continue to create capabilities for international consignments from or delivered to France.
Yet the past eighteen months both the interruption in other types of services and the amplification of e-commerce has changed the structure of the Express market, making wider and deeper capabilities more necessary. John Pearson, CEO of DHL Express, observes that “the growth in parcel shipments linked to e-commerce has considerably accelerated due to Covid-19 and is continuing at a very sustained pace in 2021. In 2020, e-commerce enabled DHL Express France to grow its volume by about 8% compared to 2019. With the recovery of trade for its long-standing B2B customers, activity at DHL Express is intensifying in 2021”. Therefore, despite DHL Express already possessing a substantial network of hubs at Brussels, the English East Midlands and, above all, Leipzig, it still feels it necessary to invest heavily at Charles de Gaulle. It is reasonable to expect further investments of this magnitude elsewhere, both in sorting hubs and aircraft fleets.
Source: Transport Intelligence, 07 October 2021
Author: Thomas Cullen