DHL Supply Chain, the contract logistics arm of DHL Group, is investing 500 million euros ($499.35 million) in India over the next five years to significantly grow its warehousing capacity, workforce and sustainability initiatives in the country.
With this investment, DHL said it will own and operate wholly owned large multiclient sites in India, adding 12 million square feet of warehousing space to its portfolio. The increased warehousing capacity is targeted to effectively cater to growing sectors such as e-commerce, retail, consumer, life sciences, technology, engineering and manufacturing, as well as automotive.
DHL said these warehouses will be enabled with accelerated digital technology solutions, including assisted picking robots, indoor robotic transport, intelligent process automation, wearable devices, voice picking, inventory management robots and algorithmic optimizations.
“Despite the current, economic and geopolitical uncertainties in the world, we see enormous growth potential in the Asia Pacific region, with India making a significant contribution,” said Oscar de Bok, CEO of DHL Supply Chain. “As a dynamic, stable and fast-growing economy, the Indian nation plays a key role for the global economy. Its investment-friendly and entrepreneurial environment makes India a preferred place for DHL Group to even accelerate its investments. With a rich pool full of highly qualified young talents and innovative digital entrepreneurs India is a favorite hub for our global contract logistics business in DHL Supply Chain and one of our priority markets.”
DHL Supply Chain India will add the 12 million square feet of capacity in key metro cities such as Bangalore, Chennai, Kolkata, Mumbai, National Capital Region and Pune. Multiclient sites are also being built in the fast-growing state capitals and Tier 2 cities such as Ambala, Baddi, Cochin, Coimbatore, Guwahati, Sanand, Hyderabad, Jaipur, Indore, Lucknow, Bhubaneshwar, Hosur and Visakhapatnam.
In addition, DHL Supply Chain India will open two Business Support Centers (BSC) in Bangalore and Pune within the next 12 to 18 months to support customer demand. Currently, the company runs three BSCs at Mumbai, Gurgaon and Chennai. These BSCs provide 24/7 value-added services, including domestic and international transport control towers, business analytics to support decision-making, freight bill audit payment, order to cash, LLP control towers and similar support services to its customers in India and across the globe.
To support its strategic expansion plans in the country, the company plans to augment its workforce by doubling the size to 25,000 employees by 2025. Investment in Skill Development and Resourcing Centers is being undertaken to induct and train employees with certification programs to prepare them for work processes changes brought about by rapid transformations and digitalization in the industry. The first Resourcing Center has been opened in Bangalore, with more to follow in Mumbai, Delhi, Chennai and Kolkata.
“Building up large multiclient sites with efficient end-to-end transport solutions along with value-added services run by highly skilled employees allows us to maximize operational efficiency and puts us in a strong position to scale according to what our customers need, across various sectors,” Vikas Anand, managing director, DHL Supply Chain India Pvt. Ltd., said.
DHL Supply Chain’s SmarTransport division will also leverage its warehouse investments to accelerate transport growth by providing strategic, scalable solutions to large customers enabling economies of scale with end-to-end service offerings. Through its asset-heavy and asset-light model, DHL Supply Chain currently offers the full suite of transport solutions include full truck load, part truck load, “milk runs,” secondary transport, intracity and intercity air movements.
In support of the DHL’s roadmap to have climate-neutral logistics by 2030, DHL Supply Chain India will be converting its entire intracity fleet into green fuel-EV versions by 2025. By the end of 2022, 100 percent of the two-wheeler fleet will be converted to EVs, and all new sites will implement green features, including solar panels for electricity, rainwater harvesting, LED lights and smart meters.
“Asia Pacific currently accounts for about 15 percent of DHL Supply Chain’s global revenue, but is among the fastest growing regions, with India being a key contributor to this growth,” said Terry Ryan, CEO of DHL Supply Chain Asia Pacific. “The Indian logistics market, worth over $200 billion now, is expected to grow at about 10 percent per year in the next five years to reach around $330 billion. We take a long-term view in India, with businesses here having reasons to be optimistic.”
In recent years, the government has also increased efforts to improve the country’s logistics performance, boost trade and safeguard foreign investment, in particular, expenditure on logistics is expected to reach $500 billion annually by 2025, DHL noted.