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DHL champions e-commerce with Hong Kong US$371m Central Asia Hub

E-COMMERCE, especially cross-border online shoppers, will change the world, smashing brick and mortar retailers to smithereens, says the men who run Bonn-based express delivery giant DHL.

"The reason why Amazon and other e-tailers are starting airlines is because they cannot keep up with demand," said DHL Express CEO Ken Allen, in Hong Kong to launch of a HK$2.9 billion (US$371.6 million) expansion to create its Central Asia Hub sorting at Hong Kong Airport.

This multiyear expansion brings DHL's commitment for this strategic hub to HK$4.5 billion, said the DHL statement.

Mr Allen was certain the soon-to-be expanded Hong Kong hub, which involves the removal of operational emphasis from Manila, would be the centre of future global growth.

"For the first time in history, retail will be entirely controlled by the consumer. Anyone who has a mobile device can and will participate," he said.

DHL Asia he said posted 12 per cent growth in shipping volume over 10 years. As one of three DHL global hubs for DHL, the Hong Kong base will be core hub of its activity in the Asia Pacific, handling 40 per cent of its volume.

"Given the rise in international e-commerce and intra-Asia trade, DHL is committed to strengthening our global network and services," said Mr Allen.

The Hong Kong facility at full capacity will move 125,000 items an hour from today's 75,000, providing a 50 per cent annual volume increase to 1.06 million tonnes - six times that of when it first opened in 2004.

Said DHL Express Asia Pacific chief Ken Lee: "Connecting 70 DHL Express gateways in the region, the hub strengthens our network that includes Shanghai, Singapore and Bangkok."

The big driver, he said would be Asia-Pacific because many of its people are young and more attuned to the e-commerce market if only because of the lower prices.

Like his boss Mr Allen, Mr Lee saw the star of the show would be cross-border shopping, particularly among the young in emerging markets.

"Even in Pakistan, not a rich country, 50 per cent of the people are below 30. When they want something, they find the money and buy it. Mature markets are different that way," Mr Lee said.

"Intra-Asia trade contributes over 40 per cent of our revenue in Asia Pacific. Equipped with fully automated X-ray inspection machines, it will increase the speed of our shipment inspection three times," said Mr Lee, who will run the Hong Kong facility.

Said Airport Authority Hong Kong CEO Fred Lam: "DHL is an important strategic partner of the Airport Authority. We welcome their decision to expand, which is essential to sustain the leading air cargo position of Hong Kong."

Already a TAPA Class A-certified facility, the expanded Central Asia Hub (CAH) will boast a state-of-the-art security system with a total of 520 CCTV cameras and an advanced access control system.

The CAH also features a Quality Control Centre (QCC) which monitors flight uplift/landing times in real time, reporting any irregularities on the spot, which in turn enables DHL to proactively notify customers in the event of flight delays or cancellations.

The QCC is linked to the Asia Pacific Network Control Centre in Hong Kong and more than 70 gateways and over 500 service centres in over 40 cities in other Asian countries.

Hong Kong is within a four-hour flight to major cities in Asia Pacific and complemented by a well-established Asia Air Network which is served by over 800 commercial daily flights.