Interview – DHL sees good Middle East growth
DHL Express, the Middle East market leader, is expecting good growth in the booming region in the future thanks to expanded domestic services, higher demand for road transport, and synergies with DHL Global Forwarding and DHL Supply Chain, regional director Phil Couchman told CEP-Research in an interview.
DHL Express is successfully defending its high regional market share, including of about 43% in the Gulf Cooperation Council (GCC) market, despite more intensive competition, he said at this week’s World Mail & Express Logistics Middle East, Africa & South Asia conference in Dubai.
“We are growing very quickly,” Couchman said. The express operator was growing at about 20% a year in the Middle East region compared to slightly lower market growth rates, he noted. But he pointed out that costs were rising fast, particularly in Dubai, due to higher salaries and local living costs as well as more expensive fuel, meaning that price rises taking cost increases and inflation into account were necessary.
Outlining DHL Express’ growth strategy for the region, he said: “We will be focusing more on small businesses, on the financial services sector and local companies.” The domestic presence in the UAE, for example, is being expanded through 26 Servicepoint outlets in shopping malls and similar locations for small businesses and walk-in customers. About 50% of DHL’s shipments are intra-regional rather than international traffic.
Although time-definite shipments through the regional air network account for 70% of shipments, stronger growth is expected in overland day definite transport in the future. “We see day definite growing fast,” Couchman said. “We are looking especially at providing the road network for DHL Global Forwarding and contract logistics for distribution mostly out of Dubai.” The DHL brand would increasingly be rolled out across the Middle East, generating new business opportunities, he noted.
“The road network has grown into the biggest scheduled day definite provider in the Middle East,” he pointed out. DHL’s Middle East road network covers the GCC countries, Jordan, Lebanon, Syria and extends into Egypt, Turkey (Istanbul) and Iran. A new trucking facility is currently under construction at Amman.
Under the AED 500 million (EUR 103 million) Deutsche Post World Net investment announced for Dubai, DHL Express has reserved 50,000 sqm for a hub at the new Dubai World Central airport. It expects to start operations at what is designed to be the world’s future largest airport at some stage during 2008. “This will be mostly commercial uplift but some DHL planes will operate there. Some of our hub activities will develop there.”
DHL Express currently operates a Middle East regional air network with 14 aircraft out of its Bahrain hub, which is linked to its worldwide network via daily round-the-world MD-11F services. DPWN chairman Klaus Zumwinkel travelled to Bahrain after announcing the Dubai investment in order to reiterate the company’s commitment to its presence in that country.
