Shanghai, Inchon Vie for Location of DHL Hub
DHL has chosen the Chinese city of Shanghai and Inchon in South Korea as the shortlists for the location of its hub for North Asia region.
The Brussels-based giant has not decided where to set up the hub as the two cities both have their advantages. On November 23, Jerry Hsu, president for DHL’s Greater China region, told journalists that DHL will make the final decision within the future three months.
The hub, which will need an investment of tens of millions of euros, will become the third one for the company in Asia in the wake of that located in Hong Kong and Singapore.
Jerry Hsu said that DHL is now expanding rapidly in Asia, thus it considers establishing a hub in the North Asia region. After completion, it will mainly cover the markets in China, Japan and South Korea as well as other areas in North Asia.
This August, DHL had signed a memorandum of understanding with Shanghai Airport Authority, the operator of Pudong and Hongqiao airports, with regard to this issue.
The signing of the memorandum of understanding indicates that DHL has intention to locate the hub in Shanghai’s Pudong Airport, but whether to choose Shanghai as the final location is still subject to the company after it weighs the pros and cons of the two, he continued.
Scott Price, chief executive officer for DHL Express Asia Pacific, revealed that Shanghai and Inchon are geographically close to each other and both has hub airport with a rather large amount of imports and exports of freight. Therefore, DHL will give priority to cost factors, including land, labor force, tax and speed of custom clearance.
In addition, the development focus and routes of its partners like Cathay Pacific Airways Ltd., Hong Kong’s flag carrier, over the future ten years are also the factors DHL will take into account.
As a matter of fact, Shanghai and Inchon have both been the promising hubs for air freight transportation in Asia in recent years.
Inchon Airport and Shanghai’s Pudong Airport ranked fifth and ninth places with an annual throughput of 2.10 million tons and 1.85 million tons respectively, according to the 2005 ranking list by Airports Council International, the international association of the world’s airports.
However, judged by the growth rate, Pudong Airport, with a rate of 13.1%, grows much faster than the South Korean airport, which crawls by 0.8% a year.
The two airports are pouring money in building all-new runways and facilitates, in an effort to win the deal with DHL.
Inchon Airport is constructing the third runway and plans to develop into a super international airport with an annual throughput of seven million tons by 2020.
Wu Nianzu, chairman and president of Shanghai Airport Authority, said that Pudong Airport wants to have five runways and three terminals so as to boost its throughput to 5.7 million tons a year in the future.
China has been the fastest growing market for DHL among its global networks. It has announced a “China priority” strategy in April to further speed up its development in the country, the world’s fastest-growing major economy.
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