Logistics Contract: Additional US$40M Investment Enhances DHL's Footprint In Yangtze River Delta And Shandong Province

DHL, the one of the leading express and logistics company, recently announced a new dedicated flight connecting Qingdao and Hangzhou with DHL's Central Asia Hub in Hong Kong. The move will increase the economic connectivity of the three cities and accelerate the inbound and outbound express business in Zhejiang and Shandong provinces. DHL has already started gateway operations at the Hangzhou International Airport. These latest investments by DHL totaled about US$40M, and are part of the planned US$110M investment in its China business in the next few years, which DHL announced in February this year.

The new ten-time weekly flight allows DHL to better meet the increasing demand for international express and logistics services and capabilities due to the rapid economic development in these regions. The new flight, operated by a Yangtze River Express Airlines 737-300 freighter aircraft with a payload capacity of 13 tons, marks Hangzhou Airport's first international air express cargo connection. The flight, together with DHL's new 2,000 sqm Hangzhou Gateway, will boost the economic development in booming cities like Hangzhou, Ningbo and Qingdao, and further strengthen DHL's market leadership in China.

"The latest investments are reflective of DHL's aim to continuously boost our service offerings to meet China's strong economic growth and our customers' requirements", said Jerry Hsu, President – Greater China Area, DHL Express. "The new dedicated Qingdao-Hangzhou-Hong Kong flight and the Hangzhou Gateway will greatly drive the economic development of the regions, and enhance our combined capability in these major logistics markets – and at the same time provide our customers with greater international connectivity."

In the Yangtze River Delta - the most active economic zone in China - Zhejiang Province is the region's engine of growth. In 2006, the total value of Zhejiang's imports and exports was close to US$140 billion, representing a growth of about 29.6 percent over 2005, and its growth in export tops all the coastal regions in China[1].

Qingdao is the leading city in Shandong Province, which is a major force behind the economic development in the Bohai Sea region. In 2006, Qingdao ranked as one of the top 10 leading import and export cities in China. Since late 2005, with the liberalization of China's express industry, Qingdao has seen rapid growth in the national and international express business.

Wu Dongming, Managing Director of DHL-Sinotrans, said, "China's rapid and steady economic development and international trade have triggered tremendous growth in the express and logistics market. Being the first international express company to enter China in 1980, DHL is committed to provide a seamless connection, with our best-in-class network infrastructure, for China's growing economy and the international marketplace, while maintaining our market leadership in China's express and logistics industry."

Currently, DHL-Sinotrans has developed the largest air express services network in China with four international gateways[2] - Beijing, Guangzhou, Shanghai and Shenzhen - as well as eight additional direct flight gateways: Qingdao, Dalian, Chengdu, Wuhan, Xiamen, Fuzhou, Xi'an (outbound only) and Hangzhou.

With the launch of the new flight and gateway and the new 24-hour clearance service provided by Hangzhou Customs, DHL-Sinotrans' customers in the Yangtze River Delta region and Shandong Province will now enjoy shorter time-to-market due to later pick-up and earlier delivery times for their shipments. The pick-up cutoff time will be five hours later on average, making it the most competitive in Zhejiang.

DHL-Sinotrans established its Hangzhou branch in 1993, and subsequently set up branches in Ningbo, Wenzhou, Taizhou, Shaoxing, Jiaxing, Jinhua and Huzhou. The company has continuously strived to provide customers with diversified and customized products and services, as well as simplifying clearance procedures, to boost the local economic development.

DHL has successfully implemented its First in China strategy, which comprised a series of initiatives launched in April 2006. These included the building of a new US$24 million flagship DHL-Sinotrans Headquarters for its express operations, and to increase the number of branches from 56 to 72 nationwide. DHL has, in fact, exceeded that target, and currently has 73 branches in China with the opening of the Lhasa branch in late 2006.

In February 2007, DHL announced that it will invest over US$110M in its China business in the next few years. This continued investment will further strengthen its market-leading position in anticipation of continued strong growth. This investment is in addition to the nearly US$1B that DHL has already invested in the Greater China region, which accounts for over half of its investment in Asia Pacific from 2001 to 2006.

About DHL
At DHL, Customer Service is back in shipping. Our mission is to provide the most flexible, personable and enjoyable experience in the shipping industry for our customers.

DHL is the global market leader of the international express and logistics industry, specializing in providing innovative and customized solutions from a single source. DHL offers expertise in express, air and ocean freight, overland transport, and contract logistic solutions as well as international mail services, combined with worldwide coverage and an in-depth understanding of local markets. DHL's international network links more than 225 countries and territories worldwide with over 300,000 employees dedicated to providing fast and reliable services that exceed customers' expectations.

Founded in San Francisco in 1969, DHL is a Deutsche Post World Net brand. For more information on DHL, please visit www.dhl.com

About DHL-Sinotrans
DHL-Sinotrans is a 50/50 joint venture established in 1986 between DHL and China National Foreign Trade Transportation (Group) Corporation. Combining DHL's leading expertise in the global air express industry and Sinotrans' unrivalled local knowledge in the China foreign trade transport market, DHL-Sinotrans provides international and domestic express and logistics services to shippers in major cities in China. Over the past 21 years, DHL-Sinotrans has developed the largest air express services network in China covering 318 cities, with 73 branch offices and over 200 locations and over 7,100 highly qualified employees.

For further information, please visit DHL China website: www.cn.dhl.com. [1] Data from China's National Bureau of Statistics [2] Definition of Gateway: facility dedicated to the movement of shipments into and out of a country

SOURCE: DHL