DHL Group to add 30% freight capacity in India

German logistics giant DHL Group will expand its freighter capacity in India by 30% in 3-5 years in anticipation of its business in the country doubling by then, chief executive of DHL eCommerce Pablo Ciano, said.

DHL Group’s revenue in India grew by over 10% year-on-year in 2024, Ciano told Mint in an interview, adding that company plans to open another large facility in New Delhi by mid-2025. Currently, DHL Group has over 140 warehouse and facilities in India. 

“We are very confident and optimistic about the business in India. We announced an investment of £250 million last year and are continuing with the set plan,” he said. “In terms of investments, we are very optimistic and very aggressive in continuing to expand the network.”

The Indian market currently contributes about 3% to DHL’s global revenue. 

“In the next three to five years we expect our business in India will double. That’s why we are investing ahead of the curve and investing in infrastructure,” Ciano said. “We believe that India is going to become a much bigger exporter of goods. All the business units are preparing to take advantage of the big opportunity that the Indian market is offering.”

DHL plans to replace six narrowbody Boeing B737 freighter aircraft with widebody Boeing freighter aircraft in a few years. Currently, the group operates eight narrowbody Boeing freighter aircraft in India.

“They are all operating at almost maximum capacity. Hence, we will upgrade the aircraft. Currently we are processing approximately 2 million shipments per day (in India) in all varieties of different services, from e-commerce shipments to the heavier B2B shipments,” Ciano said.

The DHL eCommerce CEO also requested the Indian government to simplify taxes on aviation turbine fuel (ATF) by introducing a goods and services tax-like single tax across the country. 

“Taxes on ATF vary significantly from state to state, which makes it much more complicated and it definitely doesn’t offer an equal playing field. There’s a need for simplification in the tax system, something like GST,” Ciano said. “The more that we can continue to simplify, we will be able to add more facilities.”

No threat from quick commerce 

DHL Group in India caters to high demand from the e-commerce sector and business-to-business segments, but doesn’t see the surge in quick commerce in India as a threat to its business. 

“The coverage (of quick commerce) is going to be a very small percentage, around 1-2% of the total market. A similar trend has been witnessed in other markets as well. The vast majority of the mainstream of e-commerce purchases will continue,” Ciano said.

As per data by the Airports Authority of India (AAI), India’s cargo market registered a growth of 14.3% in freight carried between April and November—to 2,488.83 tonnes from 2,177.64 tonnes in the same year-earlier period. International load registered a jump of 19.4% and domestic load increased by 6.7%.