GXO Logistics Inc. said Thursday that it has begun a multiyear program to expand in Germany, Europe’s largest logistics market.

GXO, the world’s largest pure-play contract logistics provider, will initially rent a 587,000-square-foot facility in Dormagen, considered a key logistics location in the Dusseldorf region. The facility will be the key to the company’s initial operations in the country, GXO said.

The project will be run by Stefan Van Hoof, who was recently named the company’s managing director of Central Europe. Van Hoof was CEO, mainland Europe, for Clipper, the U.K. reverse logistics specialist firm acquired by GXO in 2022.

GXO has only six warehouses in Germany, compared with 700 in Europe and the U.K. and 300 in North America. Mark Manduca, the company’s chief investment officer, said the announcement will allow GXO to prove itself in a fertile market where many of the verticals align with its strengths.

“We have an offering that will be looked upon favorably by the market,” said Manduca.

Germany is a fragmented market that’s currently dominated by DHL Supply Chain, the contract logistics arm of Deutsche Post DHL.

Germany’s contract logistics market, estimated at $20 billion in annual revenue, is expected to grow rapidly due to the modernization of supply chains, acceleration of nearshoring and increasing demand from companies to outsource noncore activities like logistics, according to GXO.