Q&A: DHL on launching the MENA region’s first-ever electric vehicle and battery logistics hub

Q&A: DHL on launching the MENA region’s first-ever electric vehicle and battery logistics hub 

By: Mark Anthony Karam
Interviews

DHL's new EV Hub enables the EV circular economy – batteries can be stored, recycled, repaired, and processed at end of life – ensuring long-term sustainability. DHL customers can simply plug this solution into their existing supply chain, thus generating long-term sustainability benefits for the region.

As sustainability continues to find itself a priority for an increasing number of companies and countries, global logistics firm DHL earlier this month launched the region’s first-ever electric vehicle (EV) and battery logistics hub in Dubai’s Jebel Ali Free Zone. Built by DHL Global Forwarding and developed in close cooperation with the EV team of DHL Customer Solutions & Innovation (CSI), the 23,500-sqm warehouse includes a dedicated EV battery storage area, which will be expanded to 2,000-sqm later this year.

EVs are critical to decarbonising the transport sector. The EV market is expected to grow six times its size over the next 10 years, on the back of surging EV sales, and more than half (55%) of new car sales by 2040 are projected to be EVs. 

This new hub enables the EV circular economy – batteries can be stored, recycled, repaired, and processed at end of life – ensuring long-term sustainability. DHL customers can simply plug this solution into their existing supply chain, thus generating long-term sustainability benefits for the region.

The Abu Dhabi SME Hub spoke with Samer Kaissi, Country Manager, Dubai and Northern Emirates, DHL Global Forwarding, to learn more about this exciting new development.

Can you tell us about your new EV Hub and how it came to be?

Decarbonisation is at the top of our global agenda at DHL. We believe that with the growing global demand for electric vehicles as a result of the convergence of engineering and modern technology, logistics companies must also adapt their offerings. According to data from Frost & Sullivan, electric vehicles will account for 16 percent of car sales worldwide by 2025. To make this a reality, we must examine the entire value chain of EVs, right from energy production to vehicle driving range, and battery safety. In fact, providing a second life to batteries after their first use is essential.

We are seeing that EVs are gaining tremendous popularity in the Middle East. According to Frost & Sullivan and DHL forecasts, there are over 2,000 AC and DC charging stations in the UAE and an estimated 19,000 EV sales in the country. Therefore, there is a need for design compliant and cost-efficient supply chains that support EV development. Our 23,500 sqm facility in Dubai South now includes an EV Centre of Excellence to drive the EV circular economy – where batteries can be stored, recycled, repaired, and processed at end of life – ensuring long-term sustainability. A multi-user site, the facility prevents the need for individual infrastructure development by manufacturers. Customers can simply plug this solution into their existing supply chain, thus generating long-term sustainability benefits for the region. This facility will provide end-to-end aftermarket solutions for EV batteries. 

How would you describe the EV industry regionally pre and post the launch of your Hub, and which main pain points will your Hub address?

There is an EV revolution in the region, buoyed by more government policies, incentives and evolving consumer behaviour and preferences. The launch of our EV hub in the region is a key part of our wider global agenda to offer innovative solutions along the entire supply chain.  We are committed to strengthening our portfolio dedicated to EV logistics, and will be investing a total of EUR 7 billion globally over the next ten years to reduce our CO2 emissions. Our strong expertise in the storage, repair, recycling and processing at end of life of EV batteries and all related parts, as well as transporting them via air, ocean and road freight, makes us the right partner to transition to a circular economy. 

The EV industry in the region is on the right path, but it needs to build an ecosystem to fulfil its true potential. Our new hub will help address many of these issues as the region’s first-ever custom-designed centre for handling and storing EV material including batteries, charging equipment, and other dangerous goods. DHL customers can share this multi-user facility, making it a cost-effective alternative to owning a specialist warehouse. 

The 23,500 sqm warehouse has a team of experts who leverage the right local knowledge, best practices and our global network to manage the dedicated EV battery storage area, which will be expanded to 2,000-sqm later this year. The EV Excellence Centre supports a fully-integrated end-to-end aftermarket logistics solution, including inbound shipment flow, warehousing, outbound deliveries and reverse solutions and recycling. We believe this facility will be tremendously beneficial for both automotive manufacturers as well as their suppliers, and will be a massive boost to the EV industry in the region.

How will your offerings and services cater differently to B2B and B2C clients? 

We have multiple solutions that address evolving B2B and B2C needs. Our EV hub is designed to cater to changing consumer behaviours. For instance, there is an increase in standard aftermarket parts served by e-commerce, which we can manage through a time definite international service directly from Dubai.  Our customers will benefit from integrated compliant solutions, such as safe storage, returns management, defective battery management, recycling, and much more, all of which will enable the growth of EVs in the region. 

On the B2B side, our regional EV hub will enable automotive manufacturers as well as their suppliers to repair, recycle and convert EV batteries, thus optimising the EV supply chain. We will offer fully-integrated inbound shipment flow, ownership of import processes for all EV-related aftermarket services, in line with regional compliance and safety standards. Furthermore, a qualified DHL team will manage all warehousing activities. There will be compliant transportation networks to provide optimised end-of-life solutions. 

How has the COVID-19 pandemic impacted the EV industry internationally, and how did this spill over to the MENA region?

Global chip shortages and several supply chain disruptions, triggered by the pandemic, continue to impact vehicle production. However, despite shrinking volumes in the automobility sector, EV sales have accelerated, experiencing double-digit growth. Currently, in Europe, EVs are outpacing diesel ICE sales. This trend is witnessed across key EV Mobility markets. 

EV sales are expected to grow as a number of governments reintroduce or extend their subsidy schemes as part of wider efforts to stimulate a “green” economic recovery. Germany has doubled the value of its EV subsidy grants and the UAE has ramped up its EV charging stations. This is in addition to many incentives and benefits announced in the UAE, such as free charging stations, bonus warranty for EVs, discounted car registration and renewal, free parking in certain areas and toll exemptions.

What are the trends shaping the regional EV industry today, and how can we encourage adoption by businesses and consumers? 

The regional EV industry is being propelled by government subsidies and other incentives. Already we are seeing that many governments in the region are investing in creating a robust EV infrastructure through charging stations. Dubai and Abu Dhabi are promoting e-scooters as the future of mobility in urban areas. Saudi Arabia announced that 5% of its parking spaces would be dedicated to EVs. There is a definite shift to EVs to meet evolving consumer preferences. Car manufacturers are massively investing in the electric revolution too; Volkswagen is investing $48bn in EVs by 2030, for example. To keep up with this trend, countries in the region will have to invest in the right infrastructure to optimise EVs. 

How do SMEs and startups fit within your Hub's business model, if at all? (incentives provided, collaborations with innovative SMEs and start-ups, etc.)

SMEs are a key part of economies the world over. However, they need support to help them fulfil many of their goals. DHL has worked with Dubai SME in the past to offer discounted freight charges as well as access to smart shipping solutions to regional players. We utilise our state-of-the-art Innovation Centre in Dubai to run EV Logistic customer workshops to partner with our customers to meet the evolving requirements of EV Logistics. We also provide specialised workshops and training programmes through this facility, allowing customers, partners, academia, and thought leaders to experience the next generation of logistics in an interactive showroom environment. Furthermore, we are always scouting for startups in the field to enrich our EV logistics portfolio of solutions.

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