Monday, June 17, 2024
“Southeast Asia is definitely a rising star in the eCommerce sector”

“Southeast Asia is definitely a rising star in the eCommerce sector”

“Southeast Asia is definitely a rising star in the eCommerce sector” says Ken Lee, CEO, DHL Express Asia Pacific.

ACW: In what ways has DHL had to ramp up operations to deal with the e-Commerce boom in Southeast Asia region?

Ken Lee: In April, we announced the expansion of our Asia Pacific air network capacity with the dedication of flights to serve growing shipment volume between Asia Pacific and the U.S. and Europe. We also adjusted our flights and changed our original flight route of Hong Kong- Ho Chi Minh City- Penang to direct flights from Hong Kong to Ho Chi Minh City and Penang.

These are all steps that we have taken to bolster our flight network, in order to meet increasing shipment demand that we’ve seen in the region. In fact, we announced last year that we are investing across Asia Pacific close to EUR690 million to enhance our ground infrastructure and more than EUR58 million to boost our air network with new aircraft and new routes. Southeast Asia is definitely a rising star in the e-Commerce industry but we are also seeing immense e-Commerce opportunities across the wider Asia Pacific region.

ACW: What long-term investments is DHL making in the Southeast Asia region to cope with this e-Commerce growth?

Lee: In our recently released preliminary results for the second quarter of 2021, we announced that the cumulative outlook for gross capex of the Deutsche Post DHL Group for the period 2021 to 2023 is at around EUR 11.0 billion.

In addition to the investments that we are making to strengthen our infrastructure, air network and operations, we are also making continued investments in technology and digitalisation. For instance, at our South Asia Hub in Singapore, we are already using Automated Guided Vehicles (AGVs), These AGVs intelligently sense the environment around them and assist our employees with the moving of shipments, palettes of cargo and containers – done so efficiently and safely. We supplement traditional forklifts at the Hub with these AGVs, which are able to lift up to one ton, thereby helping us to scale our throughput capacity up or down as and when needed.

To help our teams become more efficient in monitoring the movements of our shipments, we have also deployed a new system called the Advanced QCC (Quality Control Centre). It utilises the latest technologies in artificial intelligence, big data referencing and routing, as well as automated systems so that our employees are able to monitor the shipment movements, flag issues in real-time, and recommend alternative flight routes, when needed.

We have and will continue to hire more employees to cope with the increased demand for Express deliveries. However, most importantly, we stand ready to observe and respond to the industry and customer needs so that our customers continue to receive our high quality of service.

ACW: What are the established e-Commerce routes and markets in the region and what potential markets is DHL planning to tap into?

Lee: We are seeing an increase in shipment volume demand from Penang and Ho Chi Minh City, which is why we have made adjustments to our flight routes to cater to this growth. Besides this, Hanoi is coming into play more now.

We have previously expanded our Vietnamese operations in 2020 with the addition of four new service points in Hanoi and Ho Chi Minh City. We are next looking at refurbishing an on-airport facility in Hanoi and adding two service centres in the city.

ACW: Have lockdowns in the regions caused logistical problems?

Lee: The pandemic has in fact, reiterated the strength of our robust air network and very own, dedicated fleet of aircraft. Globally, we have over 280 dedicated aircraft and a broad network of partner airlines to serve customers in more than 220 countries and territories. In Asia Pacific, we have more than 20 dedicated aircraft in our fleet and four regional hubs supporting local and regional customers. While guidelines and restrictions have varied from country to country, we continue to collaborate and work with the local authorities so that we remain compliant of the protocols.

We also adapted very quickly to the disappearance of commercial airlines by implementing a series of comprehensive measures such as the addition of dedicated flights, implementation of quick-turnarounds and doubling rotations. In some countries, we are the only Express service provider flying in and out, providing a critical lifeline for the country.

ACW: In your opinion, how can stakeholders make the e-Commerce supply chain more sustainable?

Lee: In March 2021, Deutsche Post DHL Group announced that we would invest EUR 7 billion over the next ten years to reduce our CO2 emissions. This means we will continue to electrify our vehicle fleet for short distances and the last mile. In air transport, we aim to increase the use of sustainable aviation fuel (SAF) blend to at least 30% by 2030. Within the DHL Express division, we are already working with Shell and Neste, which will supply SAF at Schiphol Airport in Amsterdam and San Francisco International Airport, respectively. Across Asia Pacific, we will also be identifying ways to optimise our flight and ground delivery routes so that we become more fuel-efficient.

Indeed, with the rapid growth of e-Commerce, stakeholders including logistics providers are faced with new opportunities to reduce emissions within the supply chain and address the risks of climate change. From using cleaner energy at facilities, electrifying transportation fleets to using eco-friendly packaging – there are some constructive steps that the industry could consider taking to build a more sustainable supply chain. However, a multi-stakeholder collaboration is still required in order to achieve significant, positive impact that the environment needs urgently. This means policy-makers and the private sector need to work together to encourage industry players to play a more significant role in climate protection.

ACW: Based on your observation/experience how do you see the e-Commerce market developing in the Southeast Asia region?

Lee: With an e-Commerce market anticipated to be worth $172 billion by 2025 in a 2020 Google, Temasek and Bain & Company study, Southeast Asia has been in the spotlight for its immense e-commerce potential. The region is expected to continue to grow, given the rise in digital payment options and a growing demographic of digital natives.

In fact, we will see more technology-savvy millennial, who are now of an age to be professional B2B decision-makers, turning towards B2B e-Commerce for their purchasing needs. In our recently released Whitepaper “The Ultimate B2B E-commerce Guide: Tradition is out. Digital is in,” it is found that by 2025, 80% of all B2B sales interactions between suppliers and professional buyers will take place in digital channels – citing strong growth for the B2B e-Commerce market in the coming years.

The COVID-19 pandemic has pushed not only consumers online but businesses as well. Companies are now better placed to trade their goods in the online global marketplace, as they start to understand the importance of online selling platforms. This explosive growth of e-Commerce will continue to drive a surge in shipment volumes, with customers expecting nothing less than fast, prompt delivery services.

We have and will continue to hire more employees to cope with the increased demand for Express deliveries. However, most importantly, we stand ready to observe and respond to the industry and customer needs so that our customers continue to receive our high quality of service.


Stay informed. Stay ahead. To get the latest air cargo news and industry trends delivered directly to your inbox, sign up now!

related articles

IBS Software announces appointment of new Chief Executive Officer Somit Goyal

Raft platform volumes surpass AI learning milestones

Logistics sector primed for future growth says Logistics UK