America bound

The US market is a notorious challenge for any logistics company or freight forwarder. Few can compete against the sheer magnitude of UPS and FedEx on their home turf, but if any company is likely to grab its fair share of the business, then DHL Express would seem a confident choice.

Through a combination of sharp market analysis and a prepared and direct business plan, DHL Express Freight and Logistics Middle East has initiated an ambitious attack on the US market. Hoping to capture the wealth of exports being delivered from the US to the Middle East region, the policy has so far ruffled a few feathers.

"In a nutshell, DHL has identified the US as one of the major trading lanes for the Middle East, in particular the UAE, and as a result has increased its service offerings to the region," identifies Dirk van Doorn, commercial manager for DHL Express Freight and Logistics Middle East.

"Customers are continuously looking to sourcing products from locations such as Asia, Japan and China. Whilst the Euro has become progressively more expensive, the US has managed to maintain its hold on prices making it an obvious choice for customers. We believe this trend has actually increased, not just with the GCC countries but the Gulf in general," he adds.

Focus therefore turned quickly to reviewing airfreight capabilities to match the demand. Prior to the launch of its plan, DHL operated a network concept much familiar in the Middle East. Offering an average three day transit for cargo sent between the two regions, freighters used to fly to DHL's hub in Brussels before relocating to various US destinations. Now such a time scale has been significantly reduced.

"We reviewed our capacity; analysing how may aircraft were in operation and what type they were, and then set about reducing transit time, not just from the US to the UAE but vice versa. We have since reduced our average transit period to two days instead of three, and in the case of New York and the surrounding Manhattan area, we are offering a next day service," says van Doorn.

Such a reduction was only made feasible through substantial investment and a major structural upheaval. A total of US$1.2 billion was invested by DHL in its US ground and air networks. As part of this, the company modernised and expanded three super hubs and six major gateways resulting in a 60% increase in ground delivery capacity.

Of such developments, DHL's decision to operate direct flights from and to Bahrain to the US deserves immediate attention. Enabling direct flights from the Middle East to New York, through the operation of a Boeing 747, this transition strengthens accessibility between the two markets previously unexplored by the logistics giant.

However, the foundations for the project appear well judged. Targeting the export sector from the US to the Middle East, van Doorn seems clear just what sectors this encompasses. "In terms of items being imported, a large chunk derives from the automotive and spare parts sector. Supplied largely by what I call the big three; General Motors, Ford and Chrysler, there is an undoubted demand for such products in the Middle East."

"In addition we are seeing a lot of demand for high end oilfield equipment being moved in from the US. These are high specialty items such as oil drilling equipment and oil analysis equipment," says van Doorn.

Another perhaps more niche market DHL is examining is that of the aviation spare parts sector. Whilst the aviation boom engulfing the Middle East is renown worldwide, the technicalities this actually involves do not always immediately spring to mind.

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