DHL sees Asian express logistics market share grow 1-2percent

DHL, which Deutsche Post World Net AG wholly owns, said it expects its share in Asia Pacific’s express logistics market to grow at a steady rate of 1-2 pct in the next few years, mainly due to its China operations.

‘At the moment, we believe we are taking 1-2 pct market share a year (from our competitors) and we expect that to continue for the next few years,’ said DHL Express Chief Executive Officer for Asia Pacific John Mullen.

Mullen said the company’s share of the Asia Pacific express logistics market currently stands at about 40 pct.

Competitor Federal Express has about 29 pct market share, while other rivals, United Parcel Service Inc and TNT Express has 19 pct and 12 pct, respectively.

In 2003, DHL Express’ operations in Asia Pacific contributed 49 pct, or 2.5 bln eur, to its total revenue and this is expected to almost double to 70 pct within the next decade.

‘My guess is within the next 10 years or more, it’ll be up to 70 pct. We think it’ll be driven by Asia’s economic activity,’ Mullen said.

Mullen said, in the first half of this year, DHL Express’ revenue from its operations in Asia Pacific grew 19.6 pct year-on-year.

‘I don’t see the trend slowing. We see no reason why it should slacken,’ he added.

The operations in Japan, its largest market in Asia, currently make up 15-18 pct of DHL Express’ total revenue in Asia Pacific, but Mullen expects contributions from China to surpass those from its neighbor within the next 2-3 years.

‘Even though our Japanese business is growing extremely fast — we are getting 20-25 pct growth — China is growing twice as fast,’ said Mullen.

DHL Express Regional Director for Greater China and Korea Jerry Hsu said revenue from China’s express logistics business grew at an unprecedented rate of about 50-60 pct in the first half of this year.

‘It’s a record half-year growth,’ said Hsu.

‘We are certain that this level (of growth) will continue in the next 2-3 years. For the last five years, we’ve been growing at 30-45 pct,’ he said.

Hsu said DHL Express has about 40 pct share in the express logistics market in China.

DHL plans to invest a total of about 215 mln usd in China over the next five years to expand its operations in the country, Hsu said.

For example, the company said it will open six more DHL Express offices in China before the end of the year.

As for its DHL Danzas Air and Ocean business, DHL plans to invest 12 mln usd to double its presence with the establishment of operations in 37 cities, from the current 20.