News / DSV US expansion continues with major investment in California hub

Photo: DSV

DSV is betting on the US: it has confirmed it is spending some $107m to acquire a 65.6-acre plot of land in California for the construction of a major distribution facility – the latest step in the Danish logistics giant’s US expansion.

“The US is an important market for us, and we are planning a 1.4m sq ft modern logistics centre in the Inland Empire, in Southern California, consolidating some of our sites in the area and making room for growth with new and existing customers,” DSV’s outgoing head of investor relations and EVP, Flemming Ole Nielsen, told The Loadstar.

He did not say when the facility was scheduled to enter service, or the type of goods it was likely to handle.

The Inland Empire is a major shipping and logistics hub for materials and finished goods from the ports of Los Angeles and Long Beach, bound for destinations to the north and east, such as Las Vegas, Phoenix and Denver. More than 80% of California’s imported cargo is said to be shipped through the Los Angeles/Inland Empire corridor.

Amazon is the largest private employer in the region, having steadily built up facilities and warehouses over the past 20 years in response to the spectacular growth in ecommerce.

DSV has expanded its footprint in the US significantly within the past year or so. It launched flights from Phoenix-Mesa Airport in Arizona to Luxembourg – a move designed to provide direct service to Arizona’s burgeoning semiconductor and electric vehicle sectors, and to avoid congestion at major air cargo hubs.

It is investing $500m in supply chain infrastructure for the semiconductor industry in the US alone, with the construction of specifically tailored warehouses, and invested in specialised trucks for moving equipment.

At the start of this year, DSV’s US subsidiary, DSV Air and Sea, paid an estimated $46m for 87 acres of land in Mesa, Arizona, to build a 30,000 sq ft regional headquarters and a 1.73m sq ft warehouse.

And its US expansion has also focused on another secondary airport, Huntsville, in Alabama.

“We continue to develop our air charter network, adding capacity where there is demand,” Mr Nielsen explained. “Currently, activity levels are highest out of Huntsville where we have four weekly flights to and from Luxembourg – two using 777Fs originating at Mexico City’s Felipe Ángeles International Airport (NLU) and two return flights (to Huntsville) with 747 freighters.”

Last month, DSV opened an additional 1m sq ft of warehousing in the Dallas-Fort Worth area, “to serve mid-market retailers looking to expand their online business and better reach existing customers”.

North America can be a difficult play for European companies. Maersk revealed yesterday it had struggled with some of its US operations. Vincent Clerc, CEO, told investors some of the issues it had faced in ground freight were to do with the Pilot Freight trucking operation it acquired for $1.7bn in 2022 to break into the North American middle- and final-mile road freight sector.

He added: “In simple terms, the organisation has been biting off more than it could chew, and that has had some tough consequences. We have now to right-size that business in order to get back to profitable growth. This has not been a good experience.”

DSV will certainly be hoping for a better North American salvo.