DHL chooses Shanghai for its new hub | Asia| An in-depth look at news from across the continent | DW | 14.06.2012
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DHL chooses Shanghai for its new hub

As its middle class grows, China is fast becoming the world's largest logistics market. That's why Deutsche Post DHL has built a new hub in Shanghai, which is set to open next month.

July is not the best time to travel to the Chinese metropolis Shanghai. Summers in the south of China are hot and humid, and the air is dense. Temperatures can rise to over 40°C (over 100°F).

Nevertheless, this is exactly the time of year that Deutsche Post DHL's CEO Frank Appel has chosen to travel.

And he won't be there just for a day or two - he and other managers from the German logistics company expect to spend a few weeks there.

"China has become extremely important for our business," Appel told DW. "That's why I want to understand how the country is developing - to see what exactly is happening there. My colleagues feel the same. We decided to go to China together and spend some time there."

Frank Appel

Appel thinks 'China is extremely important'

Deutsche Post DHL's largest market

Last year, Deutsche Post DHL's turnover in China amounted to four billion euros (five billion US dollars). China has already surpassed Germany to become the company's largest market. And DHL, headquartered in Bonn, expects further growth.

By the year 2015, the entire market volume in the Far Eastern country - including domestic transport - is expected to grow by 10 percent annually to over 400 billion euros.

Needless to say, China is very important for the company's growth strategy. So Appel's trip makes sense, especially in light of the fact that Deutsche Post DHL's new hub for North Asia is due to open in Shanghai on July 12.

In the logistics business, "hubs" are ports used for the collection, storage and distribution of documents, goods and parcels.

Deutsche Post DHL has invested 175 million euros in its new hub in Shanghai, which will be large enough to accommodate 50 trucks and four airplanes. Around 20,000 parcels and documents will be able to be processed there per hour.

"We are by far the largest when it comes to importing and exporting documents and parcels. We are also the biggest in air and ocean freight," Appel said.

DHL fleet in Berlin

Deutsche Post DHL is not allowed a share of China's domestic market

He also pointed out that the company's success in China had been partly due to its timely market launch. Deutsche Post DHL has been doing business in China since 1980.

The chief executive emphasized the role of local Chinese management, saying that locals had German or American managers would not have been able to understand the culture and language as well.

No domestic business

Generally, Appel has a very positive impression of China but there is one point he criticizes: The fact that Deutsche Post DHL is not allowed to compete in China's domestic market. The German company is only allowed to transport goods in and out of the country.

"The regulations prohibit us from transporting parcels and documents from one Chinese city to another on the domestic market. This is a market that remains closed to us and we find that unfortunate."

Author: Jun Yan, Matthias von Hein / sb
Editor: Anne Thomas

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