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DHL Expects more Chinese Manufacturers to Join the Offshore Plant Push

Asia Manufacturing Review Team | Tuesday, 14 November 2023

 Asia Manufacturing Review Team

As firms seek to lessen their reliance on China as a global production hub, DHL Group is seeing an increase in the number of its customers searching for alternate manufacturing destinations ranging from South-east Asia to as far away as Mexico and Turkey. 

"We really do see changes in the trade pattern," DHL CEO Tobias Meyer told Bloomberg TV in an interview. "We see China+1, alternative locations to focus on China as a manufacturing hub," he said, alluding to a push by Chinese corporations to open at least one factory outside of China.

Changes in international trade patterns are anticipated to benefit logistics companies like DHL as it follows its clients, connecting the dots along global trade channels from its various cargo hubs around the world, including Hong Kong.

Companies have been working for some years on ways to mitigate risks in their supply chains, whether as a result of pandemic-related export disruptions or geopolitical conflicts and trade restrictions. Meanwhile, US tariffs on a variety of Chinese commodities dating back to the Trump administration have forced several businesses to relocate their supply chains to South-east Asia or Mexico.

"Many of our customers are looking for places to set up shop in Asean, as well as Mexico and Turkey," Meyer added, highlighting the influx of Chinese electric ato Europe. "Those changes are taking place. And that is a new pattern for many manufacturing organizations, which we do follow as their logistics service provider," he said.

Meyer expressed hope that US President Joe Biden and Chinese President Xi Jinping will be able to calm geopolitical tensions as they prepare to meet on the margins of the Asia-Pacific Economic Cooperation meeting in San Francisco later this week.