Following the opening of DHL's new air hub in the German city of Leipzig, Geoff Kehr, senior vice president of the group's Aviation Europe division, discusses the future prospects for the express courier in Europe and beyond.
What new solutions have you added to the new Leipzig hub that you lacked at your previous base in Brussels?
In Leipzig, we have built an entirely new and modern hub - in fact the most modern hub in Europe - based on highest technological standards. The sorting capacity is 185,000 shipments per shift, and the four fully automatic sorting lanes can run around the clock, 365 days a year if necessary.
The sorting line, constructed by Vanderlande Industries, is the largest of its type in Germany. In addition, a special guiding system directs incoming aircraft to their booked positions, where they are then unloaded and turned around swiftly. We also work with the most modern navigation systems, which allow us to continue to work even under the most difficult weather conditions.
Given DHL's investment into its facilities, where else is the company looking to leverage future growth?
We currently have three main regional hubs in service that enable enhanced intercontinental connectivity and span our business around the globe. The Leipzig hub is our newest and connects Europe with the world markets in Asia and America.
DHL is currently also building an additional hub at Shanghai Pudong Airport to serve North Asia, which will cost US$175 million. The Hong Kong-based Central Asia hub's expansion will increase its parcel sorting capacity and reduce the sorting processing time. Apart from this and the Shanghai project, there is no other substantial new hub in the pipeline at the moment.
What is the average age of the DHL fleet?
Due to ongoing restructuring activities it is difficult to provide a meaningful snapshot at this time. The fleet changes in progress include the introduction of new B767-300Fs and Boeing B777-300 LRFs to serve on the intercontinental routes connecting Europe with the US and Asia. The new airline will enable us to optimise our capacity on the trade routes to and from Asia, the Middle East and Eastern Europe.
What do you see as the key benefits from Lufthansa Cargo and DHL's partnership to form Aerologic?
The AeroLogic joint venture confirms our long-standing partnership with Lufthansa Cargo and takes it to a higher level, as we are building up an airline together, which will enable each partner to utilise the company's benefits according to its own needs.
Being able to share the costs of a fleet of Boeing B-777 LRF, the most modern long-range freighter, and to operate a weekday express and weekend cargo schedule are the main benefits. AeroLogic is all ready to launch operations from our Leipzig hub at the start of the 2009 summer timetable.
What specific benefits do you think the Leipzig location will pay in the face of the current economic slowdown?
The demand for intercontinental air shipments will continue to rise despite the recent uncertainty in the global economy and our intra-European business has shown a significant increase fuelled by a continued strong economy.
General shipment volumes have remained high and the international Courier-Express-Parcel (CEP) market in Europe has been growing.
In Leipzig, we have access to first-rate infrastructure and cutting-edge technology. The hub's facilities will ensure rapid and improved handling of flights and shipments - all these factors highlight the real benefits that using express services can bring to our customers, enabling reduced inventories, cost-efficient shipments, reduction of cycle times and business cycle risks.
Do you see the current fuel price crisis leading to a contraction in terms of long-haul freight, due to the higher costs?
It is less a question of regional versus global, but of first-class technology and logistics, no matter where located, that will ensure excellent services to our customers.
In June 2007, we signed a strategic agreement with Polar Air Cargo Worldwide, a US-based operator, which should give us long-term access to trans-Pacific capacity between North America and Asia.
In addition, the new routes for Asia, the Middle East and Eastern Europe should also deliver reduced costs through the sharing of aircraft with Lufthansa Cargo.