DHL Express, one of the world’s largest shipping companies, has invested $20 million to more than double its footprint in the Philadelphia area as online shopping continues to drive demand for deliveries during the pandemic.
So far this year, DHL has experienced 25% growth in shipments in the Philadelphia market, said Reiner Wolfs, DHL’s vice president and general manager for the Northeast. The German-owned company specializes in international delivery and competes with FedEx and UPS.
“We’ve seen an incredible boom” in the consumer e-commerce business, Wolfs said.
Over the last four to five months, Wolfs said, growth has also been coming from businesses that are importing more — particularly in manufacturing, high-tech, and automotive aftermarket parts.
In July, DHL said it’s investing $360 million to build and expand in the Americas between 2020 and 2022 so that it can meet demand for e-commerce and global trade.
The company added nearly 145,000 square feet of workspace by giving up its previous Philly address — 7600 Holstein Ave. — and splitting its operations between two new facilities: one at 550 Elmwood Ave. in Sharon Hill, and one at 1240 Forest Parkway in West Deptford, N.J., for a combined 238,872 square feet.
DHL signed 10-year leases at both locations. Plans for the move were in the works before the coronavirus hit in early 2020, Wolfs said.
Since then, the market for warehouse space has gotten tighter. Amazon has leased dozens of properties around the region and paid $26.5 million in June for a King of Prussia property that could be slated for warehouse development. Real estate giant Prologis paid $45 million in a bidding war for a site near Philadelphia International Airport over the summer.
Developer HRP is also planning to build a commercial hub and put up warehouses on the 1,300-acre site of the shuttered South Philadelphia refinery, now known as the Bellwether District. HRP, formerly called Hilco Redevelopment Partners, bought the property out of bankruptcy in June 2020.
DHL’s real estate timing was “a little bit fortunate,” Wolfs said. “Obviously since the pandemic, warehouse space has become scarce and rather pricey as well.”
DHL flies six days a week from its Cincinnati hub into Philadelphia International Airport. Operating out of the two facilities puts the delivery service closer to customers in Greater Philadelphia, South Jersey, and northern Delaware. The new spaces also provide a better work environment for employees, Wolfs said.
The company has felt the effects of labor shortages. “It’s been difficult to find drivers and frontline employees,” Wolfs said, adding: “We’re in full hiring mode.”
The stock price of DHL’s corporate parent, Deutsche Post AG, has gone up about 40% in the last year.