Customers seek cheaper express delivery options – DHL says there is a worldwide trend to a slightly slower service to cut costs
Global express and logistics company DHL is creating new products and services to maintain its lead market share as customers seek cheaper options in the rapidly changing industry.
New Zealand general manager Derek Anderson said that while there would always be strong demand for delivery of urgent and high-value goods, there had been a worldwide trend in the past 12 to 18 months toward a slightly slower service to cut costs.
“The express industry, like many others, has been hit by high fuel prices and a softening New Zealand economy,” Mr Anderson said.
“And with competition so fierce we are seeing more focus on cost with some shift from express to consolidated freight and deferred services which could be delivery from Australia in two or three days rather than overnight.
“We call this product Trans-Tasman Economy and it is a cheaper response to a market moving to lower costs.”
Mr Anderson said DHL also offered a Tasman airport-to-door service rather than door-to-door in which goods are dropped at the company’s Sydney depot and delivered to the receiver’s premises in Auckland.
“This cuts out some cost and still includes full clearance and delivery,” he said.
DHL operates the only dedicated freighter service on the Tasman with a bright-yellow Boeing 727 tri-jet known as the Jedi which flies Auckland-Sydney trips once a day, five times a week.
The aircraft has a cargo capacity of 130cu m or 24 tonnes.
Mr Anderson said innovations at the top end of the express market to balance the lower, cheaper end included a distribution service for small shipments going to multiple locations.
“If a customer has 20 packages going to 20 delivery points, there is one airways bill charge for shipment rather than 20,” he said.
“We have a Quality Shipment Management System which monitors the movement of goods in real time. They are checked throughout their passage and if they miss a checkpoint the item is flagged and corrected.
“Customers are immediately notified if we can’t get it back on schedule. In a strong value and urgent environment they need to know where their goods are and if there are any delays.
“Our competitive advantage is that we work with customers to provide solutions which suit them – and we lead the industry in innovation.”
Mr Anderson said DHL had built its market share to slightly more than half of the NZD250 million New Zealand express business since beginning operations here in 1974.
He said the company’s domestic land operation was run through Express Couriers, a 50-50 venture with New Zealand Post which included the nationwide 800-van Courier Post, Sub-60 for city deliveries and warehouse and logistics company Contract Logistics.
DHL also has its own fleet of more than 50 trucks based in Auckland, Wellington and Christchurch.
Mr Anderson spent 16 years with the Crown Worldwide Group including 10 years in New Zealand before holding senior executive positions in Malaysia and Hong Kong where he was recruited in March to return home and head DHL.
