Disappointing results from its forwarding division have not discouraged DHL from further investing in its road services portfolio in Asia.
The company has now rolled out an integrated road freight network linking five key Asian cities - Singapore, Penang, Bangkok, Hanoi, and Shenzhen - in anticipation of rapid growth in road freight services in the Asia Pacific region in the years ahead.
The new service offers daily departures from the five cities, with Singapore-Penang transits taking just one day, Shenzhen to Hanoi transits offered in two days, and Penang to Shenzhen in six days.
DHL Global Forwarding claimed the network, delivered as part of DHL AsiaConnect’s Less-than-Truckload service - which was launched in 2011 and initially connected Singapore, Malaysia and Thailand by road - offered improved time and cost efficiencies across the five cities.
“Road freight offers a viable alternative to other transportation modes, providing a more cost-effective option than air freight as well as faster shipment than sea freight,” said the company. “For instance, the transit time for ocean freight between Shenzhen and Bangkok takes around 13 days while the road freight option only takes five days.
“In comparison, air freight takes a shorter transit time of four days but will cost significantly more.”
A report from MarketLine published earlier this year forecast the Asia Pacific road freight market would enjoy compound annual growth rate of 8.3% from 2014-2019, taking the market’s value to US$822 billion by the end of 2019.
Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, said DHL’s truck network linked five crucial Asian markets - Singapore, Malaysia, Thailand, Vietnam, and China - which were expected to play prominent roles in China’s ‘One Belt, One Road’ and other initiatives in the region such as the ASEAN Economic Community, which is due to be launched at the end of this year.
“Across the region, the total GDP of all 10 ASEAN countries combined was US$2.4 trillion in 2013, while China’s GDP alone was US$10.3 trillion in 2014,” said Leung. “ASEAN’s global trade hit US$2.51 trillion in 2013 and China consistently appears among the top five trade partners for ASEAN members. We are confident that intra-Asia trade will continue to grow and our road freight network stands ready to support the potential trade expansion from these initiatives.”