E-commerce ‘explodes’ in Belgium: DPD to invest €60 million
Parcel delivery service provider, DPD, part of the French postal services, is planning to invest 60 million euros in new warehouses and a fully automatic sorting center for the next three years. The plans should create 500 additional jobs.
Explosion of e-commerce
The corona crisis has led to an explosion of e-commerce in Belgium. The number of parcels increased dramatically, and delivery providers were confronted with delivery problems. Bpost even introduced a ‘crisis surcharge’ to deal with the peaks. In the Netherlands, we see a similar phenomenon, with booming online orders.
DPD saw its volume during the lockdown go up with 50%. Deliveries from companies to individuals even increased by 80%. “Our most important customers indicate that e-commerce is here to stay,” says marketing and sales director DPD Belux, Frank Jahn. Most popular products during and after the lockdown are toys, coffee, food, pet food, sportswear, and pharmacy products.
That is why DPD decided to accelerate its investment plans for the next three years. The largest part of the budget – 50 million euros – is reserved for the construction of a fully autonomous sorting center in the Brussels area.
The remaining 10 million euros will be used for equipment: semi-automatic sorting machines for the three additionally rented warehouses in Sint-Niklaas, Asse-Zellik, and Lummen. The inauguration is planned in September and October.
On top of that, the company will rent two additional warehouses in Puurs to relieve the DPD establishment in Mechelen. DPD is looking for some 200 workers for the additional warehouses. That will bring the number of workers in Belgium to 700. And, according to expectations, the number of drivers will go up from 600 to 900.
“The new fully-automated hub in Brussels has to be ready by 2022,” says Silvio Mestdagh, CEO of DPD Belux. “It will quadruple our sorting capacity from 80 000 to 100 000 parcels a day to 350 000 to 400 000.
Mestdagh admits that the corona crisis put pressure on profitability during the lockdown. “But thanks to better management and more cost-effectiveness the company is doing fine.” DPD sits in the fourth or fifth place in Belgium after Bpost and PostNL.
Is DPD afraid of a price war? According to Jahn, the offer will exceed our capacity. “We expect a tsunami of parcels in autumn. There will be enough work for everybody. That is why we want to have our additional warehouses ready by September and October.”
According to Mestdagh and Jahn, 80% of DPD’s growth will come from B2C deliveries (business to customer). Last year, 60% of the company’s turnover was realized by B2B shipments (business to business). This year, this category is expected to decrease to 45%.
The rise in capacity should increase turnover from 190 million euros last year to 240 million euros in 2022. And, as soon as the Brussels hub will be ready, the company aims to double its turnover.