DHL invests $137m to exploit booming US e-commerce business

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Deutsche Post DHL Group has announced a US$137 million investment plan for the US domestic and cross-border e-commerce market. DHL eCommerce said it is making the substantial investments to expand its capabilities to serve US businesses selling abroad as they are at the forefront of global e-commerce sales.

DHL aims to exploit the global B2C e-commerce market for cross border shipments which are expected to grow from $400 billion today to a total global volume of $1 trillion in 2020, according to Accenture and AliResearch.

The announcement was made in conjunction with the DHL eCommerce and DHL Supply Chain divisions boosting their capabilities with new regional fulfillment centers in Los Angeles , Columbus, Ohio and New Jersey. The planned expenditure of $137 million until the end of 2020 will be used for the further expansion of fulfillment capabilities by adding eight distribution centres and enhancing two existing facilities in Los Angeles and Columbus, Ohio.

“There is barely any other industry that provides such a promising outlook than the e-commerce business,” said says Charles Brewer, CEO DHL eCommerce. It is expected that one billion people will shop online and across borders by 2020 with the US being the most popular origin for 25 per cent of consumers worldwide, he said.

Additionally, DHL Express celebrated the opening of a new, $1.3 million service centre facility in Chicago to meet heavy demand from e-commerce customers. And just one year ago, also DHL Global Forwarding opened up a $35 million distribution centre in Chicago. All of these developments will provide merchants with the opportunity to place inventory closer to consumers in order to speed-up delivery, DHL said.

Today’s global B2C cross-border e-commerce market comprises approximately $400 billion and is expected to expand rapidly. Particularly emerging markets are going to fuel the estimated annual growth rate of 28 per cent, followed by Western Europe and North America . Thanks to China’s growing middle class, which will reach 630 million people by 2022, most of the purchasing power will come from Asia-Pacific and equal about 48 per cent of the total volume.

Research shows that consumers increasingly buy products online that are either unavailable or too expensive in their home country. The biggest share of these cross-border purchases will revert back to US e-commerce businesses, among other reasons because consumers covet products tagged with the ‘Made in the US’ label, according to DHL.

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The new investment will also expand day definite deliveries and enhancements to support domestic and international services. “We provide the most comprehensive e-commerce platform for international trading ventures, thanks to our different divisions’ expertise along the entire supply chain, whether it is warehousing or transportation. For consumers shopping abroad, and also for businesses, it is of utmost importance that international deliveries are reliable, safe and convenient. We provide that with our network every day in every way,” Brewer added.

In North America , the company operates 20 distribution centres, including four international gateways and one centre each in Toronto and Mexico City with further facilities in Latin America are to follow next year. In the US, DHL eCommerce operates 18 distribution centres and is one of the largest partners of the United States Postal Service (USPS).