To the pop tune of ‘I wanna be a billionaire’, Allen along with senior executives Jerry Hsu and Charlie Dobbie belted out a few cleverly edited lines of the song which ran something like this: “I wanna be a billionaire, so freakin’ bad, UPS and FedEx will be sad.” Although the Express division will likely take some time before it hits ‘billionaire’ profitability, Allen was nonetheless pleased with how this year has started off , despite it typically being a slow quarter. Revenue for the Express division was up by 5.5 per cent in Q1 to €2.8 billion, with the increase being attributed to a growth in international shipments. The company added this “trend more than off set the sale of the domestic express business in the United Kingdom and France”. Operating profit rose to €216 million with doubledigit revenue growth achieved in the Americas and Asia-Pacific regions. Indeed this double-digit growth in Asia-Pacific is the key factor behind the ‘hat trick’ of announcements in Hong Kong last month, all aimed at tapping this healthy growth story.
New HK-US service
The first was an additional daily intercontinental flight from Hong Kong to Cincinnati in what DHL Express VP for global network operations and IT, Charlie Dobbie said was “a direct response to increasing demands for services from South China and Hong Kong to North America.”The new service which utilises a B747-400 operated by DHL Expresss’ ACMI partner Polar Air will enable customers to enjoy a later pick up time out of Hong Kong and the Pearl River Delta and overnight service to North America, including Canada, US, Mexico and Panama. On the back-haul this service will route from Cincinnati to Bahrain to facilitate what DHL Express said was the increased trade between North America and the Middle East. The route shortens delivery time by one day to DHL’s Bahrain Hub. 
Intra-Asia capacity upgrade
The second key announcement will see a €100 million capacity upgrade on three intra-Asian routes – Tokyo-Hong Kong, Singapore-Hong Kong, Shanghai-Hong Kong – with three B747-400 Converted Freighters (BCFs) added to its Asia Air Network. Operated by Air Hong Kong, DHL’s joint venture with Cathay Pacific, the three B747-400 BCFs with a payload of 100 tonnes each will service the three high capacity routes six days a week. Currently, two A300-600 General Freighters (GFs) each with a 45-tonne payload, ply direct routes between Tokyo- Hong Kong and Shanghai-Hong Kong. By September 2011, these two A300-600GFs will be redeployed to service five weekly services between Beijing-Hong Kong and Manila-Hong Kong, replacing two 24-tonne B727-200Fs planes which will be retired. A direct flight is also being added to connect Hong Kong to the rapidly growing market of Vietnam, Dobbie said. “The €100 million investment in three B747-400 BCFs – the biggest freighter aircraft in service – increases our capacity, connectivity and service reliability,” said recently appointed CEO of DHL Express Asia Pacific, Jerry Hsu. “It is a significant step-up for DHL’s Asia Air Network – one we’re confi dent of because we have a clear, market-driven approach to our business.” At a time of significant over-capacity in a large number of general air cargo markets, particularly the China market, Dobbie defended the capacity expansion as being undertaken in a demand-driven, measured manner. “We add capacity in a very measured and flexible way. Our load factors even with adding all the capacity we have over the last 24 months, are well over 70 per cent on average globally. “So I think we’ve been able to balance the addition of the capacity to match the volumes that we’re receiving.” He added that part of the strategy is to work with partners – like Aerologic, Polar Air, Air Hong Kong and Cathay Pacific – which not only gives added capacity flexibility, but helps generate freight as part of that relationship.
North Asia Hub on schedule
The third key announcement was essentially an update on progress of DHL Express’ US$175 million North Asia Hub in Shanghai which Allen said is on schedule to open in early 2012. The 57,000 sqm hub is situated at an airside location in the West Cargo Area of the Shanghai Pudong International Airport and will be the company’s second China-based global hub. While Hong Kong will continue to handle the large volumes of express cargo out of the Pearl River Delta region, the North Asia Hub will cater to the rapid growth in volumes being generated out of the Yangtze River Delta catchment area. Meanwhile, Jerry Hsu, currently president of Greater China Area, will take over the role as CEO Express Asia Pacific comprising of China, Japan, Korea, Hong Kong, Taiwan, SouTheast Asia, India and South Asia, Oceania and other markets and territories in the region. Hsu is a veteran business leader in Asia and over the past 10 years in DHL Express he developed and successfully led the Greater China markets to lead the express industry and enhanced the success of the DHL network. In his new role, Allen said Hsu will focus on creating “the most efficient model for this important geography, drive growth and develop DHL’s market-leading position”.
