Ken Allen, the global CEO of DHL's Express division, was at Heathrow this week to help announce a significant investment in DHL Express UK's infrastructure.
DHL is marking the 40th anniversary of the establishment of its Express division in the UK by ploughing £156m of investment, primarily to expand and update its East Midland hub, and also to relocate and expand its facilities at its Heathrow southern hub.
Phil Couchman, CEO DHL Express UK, told an exclusive gathering of press and VIPs that the investment will fall into three main areas:
East Midlands Hub
Growth in DHL's parcels business - it currently dominates in the UK with a 51% market share - means the core hub of DHL's UK operation at East Midlands Airport is set to double in size. It currently handles 23 aircraft arrivals/departures each night, and processes 160,000 parcels a night at peak times. A £90m investment in premises and new technology - it will be converted from semi-automated to fully-automated - will give it a potential capacity of 500,000 parcels per night.
In addition to the parcel-handling operation, DHL's 400-seat call centre, currently located a mile away, and its service centre will be consolidated into the site.
Southern Hub (Heathrow)
DHL Express' current site at Hounslow serves as a distribution centre, service centre (for couriers), head office and operations centre. It will be moved in its entirety to a new location in the Colnbrook area, west of Heathrow.
Couchman said the new £32m distribution centre will, like East Midlands, be configured in a 'finger-style', whereby vehicles will unload into a series of gates extending away from the main building, similar in principle to air gates at a passenger airport. It will be fully automated, with suppliers from the "normal suspects" being approached for quotes to supply the conveyors and other automation.
Couchman says he is trying to eliminate fork lift trucks from this area of the business: "There's definitely a safety pay-off there. We already have a very good safety record, but (having no FLTs on site) reduces risk. But the quality and accuracy of handling is the main driver.”
Work on both hubs is expected to be completed by mid-2016.
DHL has become the first tenant of Manchester Airport's new logistics park. "We will now be able to put our own aircraft into Manchester with this infrastructure," says Couchman, who says the investment across the entire network - over 10 depots countrywide have been upgraded over the past three years - "will sustain us for the next 15 or so years".
Additional sites in Manchester, Croydon and Sheffield will see crucial changes to their infrastructure including additional warehousing, sorting facilities and the most up to date operational processes to improve international trade, cut transit times and drive more efficient, sustainable supply chains for UK businesses.
Ken Allen commented: “This investment in the UK forms a key part of DHL’s global growth and service improvement strategy, following the recent investment of $177 million in the Middle East.
"With ongoing growth in the US and the development of our European hub in Leipzig, we’re strengthening our leadership position through improved service capabilities.”
The Chancellor of the Exchequer, the Rt. Hon. George Osborne MP said: “I am delighted that DHL is continuing to invest in the UK, supporting the growing number of British businesses selling their products abroad.
"This new investment is further evidence that our long-term economic plan is working and Britain is coming back. But the job is not yet done and we must make sure the world’s largest companies maintain the confidence they have re-gained in the UK if we are to build a resilient economy.”
John Longworth, director general of the British Chambers of Commerce, commented: "DHL is a great example of a company doing all the right things for the UK."
Director-general of the CBI, John Cridland, added: "Confidence in the UK economy will grow and cause us to invest in CapEx. DHL have done that today - it is a great tonic for the rest of British business."