Seeing new opportunities in Latin American trade, DHL Express is raising its stake in the region.
The company, whose Americas headquarters is in Plantation, invested tens of millions of dollars in its Latin American operations in recent months, including $25 million for its hub in Mexico City, $7.3 million for a new distribution center near Santiago, Chile, about $1.7 million for its Colombia hub and more than $1 million for a new operations center in Guadalajara, Mexico.
At the end of last year, DHL Express, a division of Germany’s Deutsche Post DHL, also completed a $20 million investment in a new 140,000-square-foot facility at Miami International Airport, a critical point for its Latin America and Caribbean business.
These and other investments form part of DHL’s strategic plan for the region, aimed at meeting growing demand for cargo services and continuously expanding its network.
“Latin America is a key market for us, with growing trade between the region and the rest of the world,” said Stephen Fenwick, the Plantation-based CEO of DHL Express Americas. DHL Express reported a 14.4 percent increase in shipments between the U.S. and Latin America between 2011 and 2012.
Fenwick, who took over as CEO of the Americas in early 2011, pointed out that Latin America is expanding its trade horizons.
A decade ago, he said, “the trend in Latin America was North-South trade. But now trade patterns have changed and we’re seeing North-South and East-West trade. And this trend will continue as small and mid-sized companies increase their imports and exports.”
For example, U.S. trade in goods with South and Central America has grown substantially over the past five years despite a decline in 2009 due to the recession, according to the U.S. Department of Commerce’s Census Bureau, which tracks international trade. Exports from the U.S. to this region were $137 billion in 2008 and imports were $160 billion. In 2012, exports rose to $183.2 billion and imports to $171.8 billion. For the first seven months of 2013, exports were $106.1 billion and imports $94.5 billion. And trade between the Miami Customs District and the rest of the world grew from $79 billion in 2007 to $124.7 billion in 2012, according to U.S. Customs figures compiled by WorldCity.
The company is preparing for more trade between Latin America and Asia, he noted, especially in countries like Mexico, Colombia, Peru and Chile. And intra-regional business is expected to expand as more people use online shopping.
“We’ve followed international and domestic trade patterns in the region and have expanded our network well beyond the major cities, setting up service centers in provincial centers,” Fenwick said.
To meet current and future demand for its services in the region, DHL has increased processing capacity for small packages and air freight, adding new flights, personnel and fuel-efficient ground delivery vehicles. “We’ve made significant investments to increase capacity at our Miami hub, as well as in Mexico, Colombia and Chile,” said Fenwick, who began his career with DHL in the Middle East.
For example, DHL has added direct flights from its Cincinnati hub to two high-tech manufacturing centers in Mexico — Guadalajara and Querétaro — and increased overnight service to several Latin cities and the Caribbean. The company in June completed a $47 million expansion of its Cincinnati hub, which also handles a share of traffic with Latin America.