DHL Global Forwarding takes steps to secure additional and long-term capacity for customers

DHL Global Forwarding, a subsidiary of global express delivery and logistics services provider DHL, recently announced it is taking several steps to respond to global trade growth with various freight capacity initiatives designed to support shippers.

Company officials pointed out these steps, which include securing sufficient long-term capacity on busy trade lanes like to and from the Asia-Pacific region, are due in part to increasing carrier rates brought on by what it said are shortfalls in available air cargo freight capacity.

“As global trade picks up – fueled by spiking demands in technology- DHL is seeing customer volumes increase on many trade lanes, especially in Asia Pacific,” said Roger Crook, CEO of DHL Global Forwarding, in a statement. “In this scenario, where capacity is tightening and demand is rising, upward pressure on prices is virtually unavoidable. DHL’s capacity program is targeted to meet customers’ crucial shipping needs across all industry sectors against the backdrop of rising demand.”

DHL Global Forwarding Americas CEO Mathieu Floreani explained that heading into the fourth quarter, DHL is witnessing rising demand coupled with a tightening of capacity noting that alone is not a seasonal trend.

Freighter share of the global air freight market, he said is at an all-time low of 36.3 percent as carriers continue to withdraw aircraft from their networks.

“This is leading to more congestion and increasing costs,” he explained. “We have received general rate increases from a number of global air carriers.”

To ensure long-term capacity on some of the busiest trade lanes, such as to and from Asia Pacific,  Floreani said DHL is leveraging its industry leadership position, vast network and presence in 220 countries and territories. And he said that DHL Global Forwarding has a team of knowledgeable logistics experts in place who are constantly monitoring the changes in the market with regard to capacity, and then communicating with its customers to plan their shipments in advance, in particular for the upcoming holiday season. The capacity is coming via purchased transportation.

“With this program, we make sure customers can access capacity to support their business growth at a time when market demand is generally at its highest,” he said. “This commitment is important to our customers so they may in turn meet their end customer needs.”

DHL observed that global exports are heading up, citing data from IHS showing that exports are up 4.4 percent annually in the third quarter, with the Asia-Pacific showing the most significant trade improvement gains as Asia-based emerging markets have been on a steady growth path since low growth rates during the first quarter of this year.

And it also said that air freight carriers are seeing a 7.1 percent gain in Freight-Tonne-Kilometer in July compared to July 2013, with demand in China increasing while supply is still tight. Another growth factor highlighted by DHL is that manufacturing activity in China, India, Korea, and Taiwan all showed gains in August with its strongest gains since April 2011, according to the HSBC Manufacturing PMI.

Floreani added that the U.S. economy is making strides following a slow start to the year, which was due, in part, to the harsh winter weather. And since that time, he said there has been increased demand from customers in the manufacturing sector.