DHL to Expand U.S. E-Commerce Operations
July 27 2016 - 3:30PM
Dow Jones News
Deutsche Post AG's DHL plans to invest $137 million in the U.S.
market to expand its e-commerce capability, as the German mail and
logistics giant seeks to better compete in the world's largest
cross-border package-delivery market.
DHL said Wednesday it plans to build eight new e-commerce
distribution centers and expand two that it is already operating.
At these centers, retailers can stock items for sale online so that
when a U.S. customer makes an order, the item will reach them more
quickly. The company already has 20 distribution centers in North
America.
"Our customers are asking for specific support and services when
building up that online presence," said Thomas Kipp, head of
strategy and business development for DHL e-commerce. Mr. Kipp said
consumers are becoming "more demanding" in terms of speed of
delivery.
While DHL has had a presence in the U.S. for years, it spent
heavily last decade to build out an express domestic delivery
network to compete with United Parcel Service Inc. and FedEx Corp.
on their home turf. In 2008, after heavy losses, the company
decided to scale back on express, focusing instead on international
shipments for that U.S. business segment.
Earlier this year, the U.S. made a change in trade rules that
allows Americans to import up to $800 at a time of most foreign
goods without having to pay import duties or tax, up from the
previous exemption of $200. Delivery companies have said that
change has caused an increase in cross-border online orders.
DHL has made other recent investments in the U.S., including a
new $1.3 million Express service center in Chicago and a $35
million distribution center for its global forwarding network.
The latest investment reflects the growing role that e-commerce
has in global retail. DHL said that the global cross-border
e-commerce market is expected to grow in value to $1 trillion by
2020, from $400 billion currently.
The company is also adding the ability on certain shipments to
tell customers exactly what day their package will arrive rather
than give them a window of several days.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
July 27, 2016 15:15 ET (19:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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