News / DHL makes €500m bid to increase its presence in 'fast-growing Gulf markets'

Dosecreative ID 9771971 © Jesse Kunerth

DHL Group has announced investments of more than €500m ($571,6m) in “high growth” Middle East markets, as global demand shifts with a particular emphasis on ecommerce. 

The investment, announced today, is expected to take place between now and 2030 and is focused on “the fast-growing Gulf markets” of Saudi Arabia and the United Arab Emirates (UAE). It spans all four DHL divisions of Express, Supply Chain, Global Forwarding, and eCommerce.  

The strategy, said the company, was to “prioritise growth regions and exploit geographical potentials – so-called ‘tailwinds’ – resulting from changing global trade flows.” 

DHL Express will invest in hub and gateway facilities and expand its air traffic capacities, while DHL Supply Chain will expand its contract logistics offering in the UAE and Saudi Arabia, including increased storage capacities, modernised infrastructure and tech.  

DHL Global Forwarding will focus on expanding its footprint in the region and invest in its fleet – including electric trucks. It will also pursue joint-venture initiatives, such as with Etihad Rail, to improve its connectivity and logistics capabilities. 

In particular, DHL highlighted the growth and export potential in the local ecommerce sector. As part of the investment, DHL eCommerce has acquired Saudi delivery provider AJEX, commenting: “In Saudi Arabia, for example, a strong B2C domestic market is developing, especially for high-end consumer goods.”

DHL is also focused on the region’s energy sector, including traditional oil and gas and renewable energy, as well as life sciences and healthcare verticals, noting that the Middle East was “also emerging as a major trading centre, facilitating trade between Asia, Europe, and the US, and serving as a gateway to Africa”.  

Indeed, Stanislas Brun, chief cargo officer at Etihad Airways, told The Loadstar on the sidelines of Air Cargo Europe in Munich last week, that not only was demand strong in the region, but it was also “a very good platform for redistribution”.  

He explained: “The Middle East remains very positive in terms of demand. You have more and more people shifting to the Middle East, the UAE specifically. When you look at all the trades which are opening to Africa, the Middle East is a very good platform. 

“And with some airspace being closed due to geopolitics, the Middle East is a good stop to shift cargo from Asia to the rest of the world. It’s important to keep in mind that, from the Middle East, you can fly to 99% of the globe in one flight, and this is a very important strength nowadays.” 

John Pearson, CEO of DHL Express, added: “The Gulf region is emerging as a global logistics and innovation hub. Our investment reflects the increasing strategic importance of this economic area, which connects Asia, Europe and Africa.” 

However, Mark Drusch, chief cargo officer at Qatar Airways, told The Loadstar he believed growth in this market “is all relative”.  

 “I get a report every week for each of the major regions, and the Middle East has not seen a lot of capacity added,” he said. 

“It’s all relative. If somebody wasn’t flying a Guangzhou-Riyadh route and suddenly they are, that is a massive increase in Guangzhou-Riyadh; but you went from zero to one.  It’s not like all of a sudden you went from 10 freighters a day to 50 a day. So, it’s a relative scale.”