French parcel delivery company DPD has opened a new major parcel distribution centre in Vilvoorde, near Brussels, according to Belgian newspaper De Tijd. The new construction is part of the company’s plans to make its operations within the Belgium market profitable and continue its rapid international growth.
The new complex, located on the Brussels Ring Road, received a total investment of €52 million and is one of the first two-story logistics centres in Belgium. The 4,500 metre squared depot will be used to allow subcontracts to collect parcels for delivery within the Brussels region. The complex also features a fully automated sorting centre, which DPD says is capable of handling up to 20,000 parcels an hour during peak season.
“E-commerce is reaching new highs,” says Richard de Haas, DPD’s top executive for Belgium and Luxembourg. “Through the new hub, we are increasing our capacity for the import of parcels by 50%.”
The new centre, rented to DPD by Belgian real estate giant Montea, will become an important link in Europe’s logistical network. DPD serves northern Europe from its base of Oirschot near Eindhoven in the Netherlands. The Vilvoorde location will extend the company’s reach to Belgium, Luxembourg, and the surrounding areas.
While Bpost mostly focuses on national mail delivery, and PostNL on inter-Benelux deliveries, DPD intends to cement its position as a cross-border e-commerce delivery service.
“We mainly do imports and exports. We are not a competitor of Bpost,” de Haas assured. The French logistics company has grown massively in Belgium in the last six years, tripling its turnover and the number of shipments it processes. The explosion of online e-commerce during the Covid-19 pandemic boosted the company’s growth, forcing DPD to open temporary depots to cope with demand.
In 2021, DPD processed 58.7 million shipments, a 1% increase from 2020. The company’s turnover equally reached €304 million last year, in what the company describes as its “peak year.” This year, the level of orders is set to stabilise, pushed by weak economic performance and energy prices.
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Despite massive growth, DPD has always struggled to turn a profit in Belgium. DPD Belux posted a net profit, but only thanks to a €50 million dividend paid by its Dutch subsidiary. In reality, DPD in Belgium made a net loss of €29 million.
Recently, the company’s operating model in the country switched from a largely B2B model towards delivering parcels from companies to consumers. Unfortunately, due to the advent of “free delivery” offers, this model is a lot less profitable than in the past.
Opening the Vilvoorde hub, the company hopes, will allow for greater cost savings through the closure of four depots and help eliminate “operating losses” the company’s annual report says.