DHL Express to upgrade Borneo facility in string of Malaysian investments

This week, DHL Express announced it would invest over U.S. $112,200 to upgrade its gateway facility near Kota Kinabalu International Airport (BKI), located in East Malaysia’s Sabah state. The express giant’s investments in the country will contribute to the overall development of its air cargo logistics infrastructure. 

DHL Express plans to develop the facility to support the efficient export of shipments from East Malaysia, as well as regional e-commerce shipments to destinations in its network worldwide, according to an interview with the DHL’s regional director, in The Borneo Post. The express giant will fully manage its facility’s operations making it the only international express company with a direct presence in Sabah, although the service center will continue to be operated by its existing agent. 

DHL Express Malaysia & Brunei managing director Julian Neo told said that the company decided to take full management and invest in the facility after considering the region’s prospective business. He also said that the new management and upgrades will enable DHL Express to better align its operations in Sabah with its larger global strategy. 

Malaysian airport operator MAHB, reported in its 2018 annual report that its airports handled a combined 1.08 million metric tonnes of cargo last year, up 1.3% over last year – the majority of which were international shipments. Kuala Lumpur (KUL) handled 714,669 tonnes of these cargo volumes.  

The project near BKI continues the express giant’s expansion in Malaysia – last year, DHL Express began constructing a $270,000 “Southern Malaysia Gateway” in Malaysia’s southern state of Johor according to local Malaysian Timah News. The 50,000 square foot DHL facility was designed to facilitate the movement of e-commerce shipments in and out of southern Malaysia and was slated to be completed in the first quarter of 2019. 

Southeast Asian airports have received increased attention from the air cargo community as the region is anticipated to capture an increased portion of cargo volumes in the region as production of goods shift south from China. However, Malaysian airport authorities recognize the need to further develop their overall air cargo logistics infrastructure, to avoid losing business to other competitors in Southeast Asia, such as Vietnam and Singapore, which are also expanding logistics infrastructure.  

In 2017, for example, MAHB established a joint venture with Alibaba’s Cainiao Smart Logistics Network to develop a logistics park near KUL called “Aeropolis DFTZ Park” to facilitate the Chinese e-tailer’s e-commerce shipments. According to MAHB, the logistics park is expected to almost double KUL’s cargo volume throughput capacity from 0.7 million tonnes to 1.3 million tonnes and is scheduled to be completed later in 2019. 

While all expansion efforts will benefit Malaysian airports, DHL Express’ overall expansion and investment in the region supports local government efforts to attract foreign investors to often overlooked smaller Malaysian airports that require investment to achieve sustainable growth in the region.