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INTERVIEW-UPDATE 1-DHL upbeat on peak season, to raise prices

Published 11/12/2009, 03:16 AM
Updated 11/12/2009, 03:18 AM

* Looks to increase airfreight prices by at least 20 pct

* Expects to invest in India, China, Singapore, Dubai

* Sees significant pick-up in demand from technology sector (Adds more comments)

By Harry Suhartono and Anshuman Daga

SINGAPORE, Nov 12 (Reuters) - DHL, a unit of Deutsche Post, expects a normal peak season for global trade in the final weeks of this year, the CEO of DHL's global forwarding and freight business said in an interview on Thursday.

His remarks came a day after rival United Parcel Service (UPS) gave an upbeat outlook on prospects for higher volume in 2010 for the industry.

"The good news is, it is a normal peak season profile -- the problem that came in the past year was that airlines pulled out a lot of capacity," Hermann Ude told Reuters when asked how the holiday season was shaping up.

Sluggish consumer spending and shrinking business investing have hurt shippers around the world this year. The World Trade Organisation has forecast 2009 global trade volumes will contract 10 percent, the sharpest decline since World War Two.

With revenue of 7.9 billion euros ($11.9 billion), DHL is Europe's biggest mail and express delivery company forwarding, with its freight business accounted for about a quarter of Deutsche Post's revenue in the nine months to September.

"On the airfreight side, the enormous capacity crunch we currently see, leads the general rate increase and we have exposed the rate increase to our customers," said Ude, a board member of Deutsche Post.

He added that prices were likely to rise by at least 20 percent, depending on trade routes.

Ude said the company, which also competes with Fedex Corp, was looking to invest in some growth region in Asia and Middle East.

"If you take Asia, Middle East and Latin America, the hot spots will be India, China, Singapore, Dubai (are) the potential one, a big neglected is Panama, and Hong Kong. These are the places you should expect us to take major investments."

He said some battered sectors were showing a strong pick-up in demand.

"There have beens some sectors that were relatively resilent against the crisis. Pharma being one, a lot of consumer products were and some were really bad hit - one was technology and engineering.

"Tech has picked up significantly and I think the investment goods is a very mixed picture," he said. ($1=0.666 euro)

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