Gradual replacement of older aircraft by most fuel-efficient and technically reliable freighter type airplanes
Options for delivery of additional seven planes to support cross-border e-commerce business as a profitable growth driver for DHL Express
Continuous investments will allow DHL to meet increasing global express demand and serve even more markets with non-stop flights
At the Farnborough International Airshow, DHL Express announced an order for 14 Boeing 777 Freighters, which also includes options and purchase rights for 7 additional aircraft. The delivery of the first four planes is expected to be completed in 2019.
"The acquisition of the 14 Boeing airplanes reflects a gradual replacement of our older intercontinental fleet. As the most fuel-efficient, most reliable freighter type with the best long-haul range, these aircraft will contribute to our emissions reduction targets and allow us to serve even more markets with non-stop flights. DHL was an early adopter of this type of aircraft for the logistics industry and took delivery of the 3rd B777F produced by Boeing in 2009. With extensive experience operating this freighter type, it has proven to be superior in all aspects of operation making it a logical choice," explains Ken Allen, CEO, DHL Express.
Overall, these 14 intercontinental plane replacements are capacity neutral, but operational wise with significant cost, efficiency and reliability benefits. And, while DHL Express in the past has chiefly been leasing aircraft to operate its global network on the routes, the purchase of fully owned freighter aircraft will improve the cost position of the DHL Express division going forward. For 2018, pre-payments have already been included in the group Capex guidance.
Expanding cross-border e-commerce sales will grow to $4.48 trillion by 2021, which means a growth of 19.2 per cent per year. DHL's investment in the 777 Freighters is a direct answer to the growing demand for global express capacity. Being the largest twin-engine cargo airplanes in the world, Boeing's 777 Freighters are capable of flying 4,900 nautical miles (9,070 kilometers) with a cargo load of 102 tons.
These state-of-the-art aircraft will reduce CO2 emissions by 18 per cent versus the aircraft being replaced. This will help us to contribute to greater sustainability in line with our climate protection target which is to reduce all logistics-related emissions to zero by the year 2050.
DHL Express operates over 260 dedicated aircraft with 17 partner airlines on over 600 daily flights across 220 countries.
“At the end of the day you have to know exactly what you’re doing and deliver with speed and consistency.” ? Lucas Kuehner, Panalpina’s global head of Air Freight, on e-commerce air freight. (Photo by Dan Hadfield, Unsplash)
As the growth of e-commerce continues to drive international air freight, Panalpina’s global head of Air Freight, Lucas Kuehner, talks e-fulfilment and “air freight on steroids.”
“It started off as a chance conversation between two Panalpina colleagues: one in Amsterdam, the other in Shenzhen,” begins Kuehner. He’s talking about e-commerce, e-fulfillment and air freight. And you can tell he is excited. “We really value and encourage forward-thinking ideas at Panalpina, and these two guys gave us something that no other third-party logistics provider currently offers ? they gave us air freight on steroids.”
It’s a phrase Kuehner uses repeatedly during the next half hour. “I call it air freight on steroids because that is exactly what it is,” he says. “So, consider this: you are in e-commerce, you need to use international air freight. That’s where we come in. We offer full ULD collection, of course, and destination handling. Nothing unusual in that. But in Hong Kong and Amsterdam we now have bulk customs clearance. Bulk customs clearance,” he says it again, slowly and for emphasis. “That is absolutely unique. Nobody else does this. And then, of course, after the bulk customs clearance and pre-sorting at destination, we re-inject the goods into the supply chain for onward distribution.”
In the Netherlands
The advent of this air freight on steroids could not be better timed. With Panalpina posting record results last year for air freight, the company is very aware that the growing e-commerce industry will also positively impact its business, particularly as it is the only global player active in the Dutch cross border e-commerce market.
“Amsterdam Airport Schiphol gives us a fantastic foothold to deliver across Europe, and the bulk customs clearance together with the fact that we receive the shipments directly without going through a ground handler, allow for a quick delivery.”
This is vital within e-commerce. For the likes of Amazon and Alibaba, after their customers have clicked ‘buy’ everything after that is wasted time. While instant gratification ? in the shape of immediate delivery ? might not be possible, shaving time from an already-quick delivery is imperative.
And South China
E-commerce is the fastest growing sector driving global air freight volumes, and South China, where Panalpina has a dedicated Chinese-speaking, e-commerce team in place, is a key origin. “While it is difficult to put a precise number on e-commerce air freight, because it is not officially labelled as such, we have gone from zero to an estimated 20,000 tons in only two years. The actual figure is likely to be higher. We’ve managed exceptionally well to meet the expectations of big marketplaces and their suppliers, the latter being our most important e-commerce customers,” explains Kuehner. In addition to volume growth, Panalpina is focusing on expanding e-commerce transportation to other trade lanes including the transpacific route to the USA and to other European destinations.
Global peak season for e-commerce
“We have definite peaks in e-commerce, which has an impact on our air freight operations,” says Kuehner. “For example, with big dates like Cyber Monday, Black Friday and Singles’ Day all happening in November, it gets incredibly busy.” While Cyber Monday and Black Friday are traditionally US events, and Singles’ Day is thought of as a Chinese occasion, Kuehner argues that you can see these are growing into global shopping events, with the air freight volumes to prove it.
“Those peaks are welcome, of course, and they aren’t going to go away. But we also have to be mindful of our other customers. We cannot allow their operations to be affected by a tsunami of e-commerce.”
How does Panalpina manage that? “It’s quite simple,” says Kuehner, “we talk to our customers and let them know that space is going to be at a premium from November onwards, and that it is unlikely to get any quieter until February. We do all we can to communicate this, and we also pre-procure additional flights for the busiest lanes. “But if you want to guarantee space, you have to book early.”
Preparation is key for Panalpina
If November is the busy time for air freight, the months leading up to that are the busy ones for Kuehner and his global team. “Yes, now is the time to have all the planning in place,” he says. “And this market will get bigger not only because of the big existing e-commerce platforms, but others will have to follow suit too. Traditional stores are also increasingly turning to e-commerce, and to air freight.” In its classic role as a consolidator, Panalpina is also interesting for these smaller e-commerce customers.
“It’s not rocket science what we do. We own no assets ? we orchestrate everything. But at the end of the day you have to know exactly what you’re doing and deliver with speed and consistency. That includes staying on top of customs and security regulations, because nothing can go wrong,” concludes Kuehner
Panalpina, the Swiss freight forwarding and logistics company, has opened a new, purpose-built logistics center in Singapore. Strategically located at Pioneer View, the new facility is constructed over six floors and offers 25,800 m2 of usable warehouse space, which is equivalent to 3.5 FIFA-standard football pitches.
Speaking at the official opening of the facility, Panalpina CEO Stefan Karlen said: “Singapore is a very important consolidation hub for ocean and air freight. The nation-state is investing in the expansion of its ports, and a fifth runway is under construction at Changi Airport.” Karlen also stressed that 96 of Panalpina’s top 100 global customers have a base in Singapore.
“Against this backdrop, Panalpina plans to offer Air and Ocean Freight services including value-added logistics services to companies, particularly in the energy, healthcare, high tech, manufacturing, consumer and retail, as well as fashion industries.”
The majority of the space of the multi-purpose facility is already rented out to customers, and Karlen was keen to underline the importance of technologies to the Singapore facility, as well as to the company as a whole.
Panalpina plans to test and use many new technologies in Singapore, including the Internet of Things (IoT), augmented reality, and various automation systems. The new facility could also run 3D printers on behalf of customers, meaning it could one day become a hub for distributed manufacturing.
Karlen, who himself was once based in Singapore, took the time to meet and chat with Panalpina’s front-line staff, as well as with attending dignitaries, including His Excellency, Mr Fabrice Filliez, Swiss Ambassador to Singapore.
GROUND株式会社（本社：東京都江東区、代表取締役社長：宮田 啓友、以下「GROUND」）と機械工具卸売商社のトラスコ中山株式会社（本社:東京都港区、代表取締役社長:中山 哲也、以下「トラスコ中山」）は、国立研究開発法人新エネルギー・産業技術総合開発機構（以下「NEDO」）の助成事業「AIシステム共同開発支援事業※1」の実証実験として、2018年７月上旬よりGROUNDが自社開発するAI物流ソフトウェア『Dynamic Allocation System（ダイナミック アロケーション システム）®※2』（以下『DyAS®※2』）を用いた「物流センター 在庫・リソース配置支援ソフトウェアの共同実証」に取り組みます。