News / DHL Supply Chain eyes growth in Latin America and invests €500m

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DHL’s supply chain division is bullish on Latin America. Last week it announced plans to invest €500m ($562m) there by the end of 2028.

The money will flow into new technologies and digitisation, the expansion of DHL Supply Chain facilities and ESG initiatives to reduce its carbon footprint and develop more sustainable solutions for clients.

DHL Supply Chain global CEO Oscar de Bok said there was “exponential growth” in the region, which fuelled rising demand for supply chain management services.

According to IATA statistics, in May Latin America was the region with the strongest growth in airfreight traffic, showing a 3.6% rise in cargo ton-km, while airfreight capacity expanded 14.7%.

This growth is led by Mexico, which has seen a massive influx of investment and a corresponding rise in exports. Last year it drew in $35bn in direct foreign investment, Mr De Bok pointed out. In May, Mexico’s exports were up 5.8% year on year and, according to the Association for Supply Chain Management, it overtook China in Q1 to become the biggest source for US imports.

Mr de Bok attributed the Latin American growth in supply chain business to a combination of robust growth and a shift in sourcing by North American companies. Instead ‘near-shoring’, he and his team refer to this as ‘omni-sourcing’, arguing that the trend is characterised by an effort to improve resilience through having diverse sourcing bases rather than one, and closer to end markets.

DHL is beefing up its infrastructure with the addition of more large multi-customer campuses. Mr de Bok said: “We see those investments are really fast filling up and we need to continue to drive and help our customers to grow in this region.”

This is flanked by the expansion of the fulfilment network to increase flexibility and set up more facilities close to end markets.

Digitalisation is a second key plank of the expansion plan, centred on digital platforms customers and carriers can access, with investment also going into automation and robotics.

At the same time, the company will spend on decarbonising its domestic fleet through greener alternatives and retrofitting its facilities to cut emissions, aiming to achieve carbon neutrality for all sites by 2025.

On the sustainability trail, DHL inaugurated a ‘centre of excellence’ for electric vehicles in Mexico after the announcement of the investment plans. According to the company, this is the first in the Americas to store and distribute electric batteries for the auto industry.

Not surprisingly Mexico, which has a sizable auto industry, is set to receive the largest part of DHL’s investment, alongside Brazil. Mr de Bok said that Chile, Peru, Argentina and Colombia also stand to get significant investment.

DHL Supply Chain employs over 36,000 people in some 242 locations in Latin America, with 3m sq ft of warehousing space, serving more than 600 customers in the region.