Logistics leader aims to get things moving in QIANHAI Project

Not long after it was formed 43 years ago, DHL pioneered express delivery in the Asia-Pacific region and became the first such service to enter China.

Now, the world's leading logistics company has been quick off the mark again to become the first to sign up to the new Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone established by the Chinese government and due for completion in 2020.

On July 17, DHL Global Forwarding, a subsidiary of Deutsche Post DHL, announced the signing of a memorandum of understanding for strategic collaboration with the zone's administration.

The agreement allows DHL to establish its presence in Qianhai, the testing ground of China's new financial innovation, set to become a thriving commercial center and one of the world's biggest logistic hubs, thanks to preferential policies granted by the State Council.

Under the terms of the memorandum, DHL will set up an integrated logistics center in Qianhai and take advantage of the bonded zone's preferential business policies, logistic facilities and strategic location.

The center, located in Qianhai bonded port, was jointly opened on July 19 by DHL and China Merchants Bonded Logistics Co, a subsidiary of China Merchants Group.

Frank Appel, CEO of Deutsche Post DHL, says the opening of the new logistics center marks an expansion of DHL's service capabilities.

"It represents a concrete manifestation of our ambition to be a provider of choice by making our customers' lives easier," he says.

"We believe Qianhai is a strategic area of rapid expansion in logistics and it will be an engine of modern development."

Fu Yuning, chairman of CMG, says the group will enhance the strategic partnership with DHL and expand its investment in the development of Qianhai, which plays a vital role in the construction and operation of the Qianhai bonded port, as well as advancing the Hong Kong-Shenzhen service industry development.

The project combines CMG's expertise in asset-heavy investment, bonded port operations and management with DHL's established role in logistics and advanced customer service capabilities.

It is an important pillar of DHL's global logistics strategy, operating as DHL's regional shipping hub and distribution center in southern China, says Edward Hui, CEO of DHL Global Forwarding, Hong Kong, Macao and South China.

According to its annual report, Deutsche Post DHL's global revenue reached 52.8 billion euros ($66 billion) in 2011, the Asia-Pacific region accounting for 19 percent. At more than 4.2 billion euros, revenues in China already represent more than half of DHL's total Asian revenues.

"As the global logistics industry leader, DHL is excited to be part of the development of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, which is set to reach new international logistic benchmarks," Hui says.

As part of the new industry cooperation zone, the bonded port possesses the highest level of customs surveillance in China. Its mission is to consolidate the development of a modern service industry and help the improvement of other industry sectors in the Pearl River Delta region.

"DHL's involvement at Qianhai is a historic opportunity to further expand its services, accelerate its business integration, promote resource sharing and innovate its business model," Hui says. "DHL's leading role in the supply chain services industry there will significantly help the area's development."

The company will also look at the feasibility of establishing a regional business headquarters at Qianhai.

The DHL-CMG project is fully supported by the Shenzhen government.

Zhang Wen, vice-mayor of Shenzhen, says that innovation is the life and soul of Shenzhen and the main driver for the logistics industry to transform and move to the next level.

Shenzhen will seize the opportunity provided by the special economic zone innovation development to maintain steady growth, but in the long run, he says, the city must prioritize to speed up transformation and attract more resources in various areas, including low-carbon development and social construction.

As China will remain the main engine for regional and global economic growth for years to come, DHL is also looking to develop and expand its business across the country.

"We are committed to retaining our market-leading position here by helping international players to be successful in China, as well as supporting Chinese fast-growing enterprises in their international growth," says Appel. "As a pioneer in the Chinese express and logistics market, we will be capitalizing on the massive opportunities this country of superlatives is offering."

On July 12, the company announced the opening of its biggest express port in Asia, DHL Express North Asia Hub, at Shanghai Pudong International Airport, with total investment of $175 million (139 million euros).

The company also announced plans to invest $132 million in eight aircraft to service high-demand routes between Shanghai and North Asia, Europe and the US, by 2014.

Last year, the company bought three Boeing 747-400 converted freighters for 100 million euros to increase its capacity in the region.

"DHL pioneered express services in the region 40 years ago, and was the first international express company to enter China 32 years ago," says Ken Allen, CEO of DHL Express. "Shanghai is one of the key commercial centers of China and gateway to the Yangtze River Delta, which accounts for almost 39 percent of China's total value of imports and exports.

"The DHL Express North Asia Hub will play a critical role by supporting growth, improving transit times and network reliability, and providing a foundation for later pick-ups and earlier deliveries for customers across North Asia."

Last year, DHL Global Forwarding opened five new offices in Central and East China to expand its China coverage and meet the demands of shifting manufacturing patterns.

At present, DHL Global Forwarding China has branch offices in 40 cities across the country.

yanyiqi@chinadaily.com.cn