Logistics giant DHL is investing €500m in India over the next five years to build warehouses using the latest automated technologies.

The investment should significantly grow DHL’s warehousing capacity, workforce and sustainability initiatives in the country. With this investment, it will own and operate wholly-owned large multi-client sites in India, adding more than one million square metres of warehousing space to the group’s existing portfolio.

The increased warehousing capacity is targeted to cater to growing sectors such as ecommerce, retail, consumer, life sciences, technology, engineering and manufacturing as well as automotive.

These warehouses will be enabled with accelerated digital technology including assisted picking robots, indoor robotic transport, intelligent process automation, wearable devices, voice picking, inventory management robots and algorithmic optimisations.

“Despite the current, economic and geopolitical uncertainties in the world, we see enormous growth potential in the Asia Pacific region, with India making a significant contribution,” said Oscar de Bok, CEO of DHL Supply Chain. “As a dynamic, stable and fast-growing economy, the Indian nation plays a key role for the global economy. Its investment-friendly and entrepreneurial environment makes India a preferred place for Deutsche Post DHL Group to even accelerate its investments. With a rich pool full of highly-qualified young talents and innovative digital entrepreneurs, India is a favourite hub for our global contract logistics business in DHL Supply Chain and one of our priority markets.”

DHL Supply Chain India will add 1.1 million square metres of capacity in wholly-owned multi-client sites in key metro cities including Bangalore, Chennai, Kolkata, Mumbai, National Capital Region and Pune. These cities are among the top contributors to India’s overall GDP. Furthermore, multi-client sites are being built in the fast-growing state capitals and tier-two cities such as Ambala, Baddi, Cochin, Coimbatore, Guwahati, Sanand, Hyderabad, Jaipur, Indore, Lucknow, Bhubaneshwar, Hosur and Visakhapatnam.

DHL Supply Chain India will also open business support centres (BSCs) in Bangalore and Pune within the next 12 to 18 months to support customer demand. Currently, the company runs three BSCs at Mumbai, Gurgaon and Chennai. These BSCs provide round-the-clock value-added services including domestic and international transport control towers, business analytics to support decision-making, freight bill audit payment, order to cash, LLP control towers and similar support services to its customers in India and across the globe.

To support its expansion plans in the country, the company wants to augment its workforce by doubling the size to 25,000 employees by 2025. Investment in skill development and resourcing centres is being undertaken to induct and train employees with certification programmes to prepare them for work processes changes brought about by rapid transformations and digitalisation in the industry.

The first resourcing centre has been opened in Bangalore with more to follow in Mumbai, Delhi, Chennai and Kolkata.

DHL’s smart-transport division will also leverage its warehouse investments to accelerate transport growth by providing scalable options to large customers enabling economies of scale with end-to-end services. Through its asset-heavy and asset-light model, DHL offers the full suite of transport options include full truck load, part truck load, milk runs, secondary transport, and intra-city and inter-city air movements.

In support of DHL’s roadmap to have climate-neutral logistics by 2030, DHL Supply Chain India will be converting its entire intra-city fleet into green fuel and EV versions by 2025. By the end of 2022, all the two-wheeler fleet will be converted to EVs. Furthermore, all new sites will implement green features, including solar panels for electricity, rainwater harvesting, LED lights and smart meters.

“Asia Pacific currently accounts for about 15 per cent of DHL Supply Chain’s global revenue but is among the fastest growing regions, with India being a key contributor to this growth,” said Terry Ryan, CEO of DHL Supply Chain in Asia Pacific. “The Indian logistics market, worth over $200bn now, is expected to grow at about ten per cent per year in the next five years to reach around $330bn. We take a long-term view in India with businesses here having reasons to be optimistic.”

In recent years, the government has also increased efforts to improve the country’s logistics performance, boost trade and safeguard foreign investment, in particular expenditure on logistics is expected to reach $500bn annually by 2025. A logistics division was recently established to introduce positive changes to existing procedures and bring related technology and innovation to increase efficiency.

“Building up large multi-client sites with efficient end-to-end transport along with value-added services run by highly skilled employees allows us to maximise operational efficiency and puts us in a strong position to scale according to what our customers need, across various sectors,” said Vikas Anand, managing director of DHL Supply Chain India. “As one of the best places to work in India, we will continue to invest in our people, to deliver the best service quality to our customers.”