DHL seeks air efficiency to counter rising fuel surcharges
Deutsche Post DHL said yesterday that it was concerned that the rising fuel prices would constrain growth – but that prices were not yet high enough to start significantly affecting the global supply chain. Speaking to reporters in New York yesterday, Ian Clough, chief executive of DHL Express US said initially much of the fuel price increase was being passed onto customers, which kept DHL’s own costs from being affected.
He said: “Initially a low of the increase in fuel prices is mitigated because as with the rest of the industry, we work through a fuel surcharge.
“Our concern is that the increase will constrain growth.”
Frank Appel, the Deustsche Post chief executive said investments in green technologies would become more attractive if fuel prices keep on going up, but he said: “The price has to go much higher than this to change the situation in the global supply chain.”
With continuing fears about Middle Eastern unrest, Oil prices pushed above $107 a barrel today (April 1), at one point reaching the highest level since September 2008 in New York trading. Brent crude, the benchmark for Europe and Asia, was up to $118.15 a barrel.
The DHL executives were speaking as the company unveiled its latest move to tackle the sustainability of its transportation network, with 80 electric or hybrid vehicles to be deployed in Manhattan.
Air upgrades
But while the transformation of vehicle technologies may take a while to significantly affect fuel consumption, in the shorter term DHL is working on ways to reduce fuel consumption in its air fleet, a move that also fits in with its global sustainability initiative, GoGreen. The initiative seeks to cut DHL’s carbon emissions by 30% by 2020.
DHL has already “dramatically” upgraded its fleet from less efficient DC9s and DC8s to 767s and for intercontinental routes 747s, said Clough.
The addition of winglets to existing aircraft can also increase fuel efficiency, by 4-5%, he said.
As with its rivals FedEx, DHL is also seeking to move to the more modern and efficient Boeing 777 Freighter. It has eight of the aircraft already, two arriving recently, though Appel noted that the aircraft is currently “sold out”.
The DHL Express US CEO said: “We are looking at making improvements to 15% of our jets worldwide over the next few years, including moving to 777 aircraft, which are more efficient, and modifying existing aircraft.”
The DHL executives also revealed yesterday that the company is working on new models of service to make more use of road and rail in place of some parts of air routes for suitable shipments.
Appel said: “For example, China is a huge country, and if you go from the East Coast of China to the west before flying, you save a lot of flying. It comes with a certain delay, but not everything needs to be delivered overnight.
“We are asking our customers exactly what it is they need to get there quickly,” the Deutsche Post CEO added.
