DHL rides Africa, Mideast ties for Asia growth

DHL said its business shipping goods from Asia to Africa and the Middle East should post double-digit growth in the coming years, offsetting weakness in shipments from Asia to the United States and Europe. Over the past two years, DHL’s forwarding of finished goods such as clothing, medicine and machinery from Asia to emerging markets in Africa and the Middle East has grown 18 percent per year, and that inter-regional growth will remain strong.

Deutsche Post has been slashing costs and improving efficiency to revive growth strained by the global recession.

“These markets had been untapped potential for DHL and we have really focused a lot of resources there,” Amadou Diallo, the chief executive for DHL global forwarding for South Asia Pacific, told Reuters.

“I think we can grow high double-digits for a number of years. Over 15 percent,” he said.

To accommodate that growth, DHL is planning to establish centres in each of the 46 Asia countries it serves to handle fashion and apparel items, from the 15 centres it now operates.

Those trade flows are increasing as consumption and demand in traditional markets in the United States and Europe are slowing, while China’s appetite for raw materials and Africa’s growing middle class are moving in the opposite direction.

“We already do some 30 charter vessels from China to Angola alone on a monthly basis,” he said.

DHL is also moving into the oil and energy sector in the region, a business in which it has deep experience, but largely in other more developed regions of the world.

“Two years ago it was insignificant,” he said, referring to DHL’s oil and energy team in Singapore, which now consists of about 200 people.  The company said earlier this year it planned to triple the number of regional transportation hubs in China to 15 by the end of this year.

But the traffic is not one way, said Diallo. He pointed to growing shipments of African wool bound for manufacturing centres in Asia as a case in point.  Asia trade volumes now make up about half of DHL’s global business, and are growing faster than other regions.

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