DHL Express to double capacity of European logistics hub

FRANKFURT Tue Dec 10, 2013 6:38am EST

FRANKFURT Dec 10 (Reuters) - Deutsche Post,, the world No. 1 postal and logistics group, will invest 150 million euros ($206 million) to double capacity at the European hub of its express delivery business, it said on Tuesday.

The DHL Express division, which posted 14 percent growth in third-quarter profit from operating activities to 263 million euros, saw its European shipments grow 8.7 percent in January to September this year.

"On the back of that we've had some moderate market share gains," DHL Express Europe CEO John Pearson said, without providing details. DHL Express competes with United Parcel Service and Fedex Corp.

Asked to comment on Deutsche Post's plans to use drones to deliver parcels in future, Pearson said the company had been looking into the idea.

"I think it will be quite some time before you see the mailman disappear off the streets of Germany and Europe to be replaced by drones. It's an interesting idea. I think it has a long way to go before it becomes a commercially viable proposition," he said.

Deutsche Post DHL AG on Monday launched in Germany test flights of a delivery drone, a week after Amazon.com Inc said it was developing drones to deliver packages to its customers.

Deutsche Post executives said they were testing the drones to deliver medicines in areas that are hard to reach.

Meanwhile, work on the new facilities in Leipzig will start this month and the expanded warehouse with a new shipment sorting system will be operational from the fourth quarter next year.

There are around 3,500 people currently employed in Leipzig, processing about 90 percent of DHL Express shipments in Europe, and the investment will create around 400 jobs.

Roy Hughes, Vice President for Network Operations Europe, told reporters that while the sorting capacity was being expanded, the company would continue using the current fleet of aircraft before acquiring larger planes in the future.

($1 = 0.7289 euros) (Reporting by Marilyn Gerlach and Matthias Inverardi; Editing by Mark Potter)

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