Logistics provider and delivery service company DHL apparently isn’t ready to cede the booming U.S. ecommerce delivery market to competitors Federal Express, United Parcel Service, the U.S. Postal Service and Amazon.
To remain competitive and grab more market share in the U.S., DHL eCommerce Solutions, a division of Deutsche Post DHL, is investing $300 million over five years to open five new distribution centers, upgrade its information technology network and make other infrastructure improvements.
With the investment, DHL says it will increase the square footage of its U.S. distribution centers by 70%. So far, DHL has opened two new centers it calls international export gateways in Franklin Park, Illinois, and Whittier, California. A third new center is slated to open this month in Carteret, New Jersey.
Altogether in the U.S., DHL operates 19 distribution centers, three corporate offices and employs 4,200 workers. These DHL distribution hubs and employees primarily service business-to-consumer (B2C) online merchants, shipping lightweight packages and parcels domestically and overseas.
“As our network grows and we become more efficient through automation, our customers will benefit by getting their goods quicker to their eager consumers,” says, DHL eCommerce Solutions, Americas CEO Lee Spratt. “We are investing long-term because we believe consumers will continue to buy more online, and we will see additional online shops popping up, so we want to be prepared to meet this future demand.”
The investment in the U.S. is the second major expansion DHL laid out for North America and South America this year.
In July, DHL Express announced it was investing more than $360 million between 2020 and 2022 to build new and expand existing facilities in the U.S., Canada, Brazil, and Mexico.
In Miami, DHL will expand its regional hub and plans on building a new center in Canada in Hamilton, Ontario.
The investment is aimed at adding new service centers and upgrading existing facilities throughout its regional network to support first- and- last-mile pickup and delivery operations, says DHL Express Americas CEO Mike Parra.
The investments are needed because of significant growth in B2B and B2C ecommerce shipments, which in the first quarter averaged 33% more shipments per day over the previous year.
“With an ever-increasing number of consumers shifting their shopping activities online, and the sharp rise in businesses selling their goods in the global marketplace, we need to continue the critical investments in our network infrastructure to meet the growth demands in international ecommerce and global trade,” Parra says.
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