As e-commerce booms in Malta, DHL plans expansion

Logistics company is seeking new facilities to stay ahead of demand as mail volumes from online shopping surge to record high.

Logistics company DHL Express Malta has seen an unprecedented rise in business in recent years driven by a boom in Malta’s e-commerce market. To keep pace with the rapid growth of online shopping, DHL is seeking to invest in new premises and warehousing infrastructure. The business to consumer segment accounts for 30% of imports in most European countries, while in Malta it now represents 75% – a 23% increase on last year’s figures, says Charles Schiavone, Country Manager DHL Malta. He adds that DHL’s current site is not large enough to handle an additional increase in volume, which is expected in the coming years. “We already have an alternative site in mind within the airport parameter because we need an airside facility.”

Volume Growth

DHL Express, a wholly owned subsidiary of Deutsche Post DHL, has been operating in Malta since 1983. In the six years up to December 2016, the Malta workforce has increased by 70%, with the total headcount now reaching 70. The company has seen growth in all areas, says Schiavone. “Starting with the packages handled, the growth in volume has been in double-digit figures since 2012, especially where imports are concerned, but growth in single digit figures has also been registered in exports.” Recently, DHL has been handling several pallets of bulky shipments per day. Clients include the pharmaceutical industry, the aviation industry, as well as the manufacturing sector, with DHL bringing in engine parts, manufacturing components and even raw material.

New Premises

The extension of DHL’s logistics infrastructure in Malta is currently a top priority. “Two years ago, our parent company drew up plans to extend our current site. This year, when we were about to implement those plans, we revisited our calculations and realised that while we were expecting the extension to last for 10 years, with our current rate of growth the premises will only last for eight years, and there is no opportunity to expand further on our present site,” explains Schiavone. As a result, the project has been shelved until a new site has been secured. “It will be a greenfield site that will enable us to develop it specifically for our needs, building on the experience of DHL internationally.” This is a three-year project, but in the meantime, DHL is working on a temporary extension that is expected to be in place before the busy Christmas period.

Inbound Mail

Malta’s booming e-commerce sector has brought about new opportunities as well as demands for the logistics niche: Express services. In order to satisfy the rising needs of the sector, DHL has invested in automated lockers in various locations to store packages and parcels for customers to pick them up, as well as vans with bigger capacity satisfying bulky incoming shipments like large flat screen TVs and dehumidifiers. “Our fleet of mid-size vans that have to cope with Malta’s narrow urban roads in village cores have increased from 21 at the beginning of 2015 to 28 at the end of 2016,” says Schiavone.

The majority of shipments arriving in Malta stem from other EU countries, however DHL is also recording increased business with China, Taiwan and Hong Kong. While the UK is one of DHL Express' main markets, it is not yet clear what effect Brexit will have on both the company and the sector, says Schiavone. “We also receive a lot of packages from Germany and Italy in the EU, so the Brexit effect cannot be quantified at this stage.”

Growing Export Business

DHL Express Malta looks forward to increased export business on the back of the country’s growing reputation as a hub for trade and transport. Companies can benefit from a dedicated DHL cargo plane. While DHL Malta cannot influence the plane’s departure time as this is allocated by DHL’s Network Operations, “we are lucky in Malta because there are other bigger countries in the DHL network that do not have a dedicated DHL aircraft,” explains Schiavone. “We have to make the most of our time window and encourage our export customers to have their packages ready for collection at the expected time."



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