DHL Express in Europe
However, Pearson adds: “Some of their customers are looking kind of service we need.”
He does not believe that there will ever be more than three or four major international express operators in the European market, however much this might be a goal of the antitrust officials.
“Cost of entry is prohibitive,” he says. “There wouldn’t ever be a fifth player, unless a Chinese company decided to put a lot of investment into coming here.”
Flexibility in the network
DHL Express CEO John Pearson, pictured at his company’s Leipzig hub
Although there has been talk of customers shifting from premium to economy air services in the express market, and from air to ground or ocean transport, particularly in the important US market, Pearson says DHL Express has seen “hardly any” customers shifting from its time definite international products towards deferred day definite international offerings in Europe.
Customers are buying speed and reliability, he says. However, the company is pushing for greater efficiency and flexibility in its air network, including partnerships with companies such as Air Hong Kong, Polar Express and Aero Logic, its joint venture with Lufthansa.
“We’re building the best intraregional and intra-continental air network that provides late as possible pick up and early as possible delivery,” Pearson explains, adding that if it does not improve transit times, DHL Express will not add another aircraft to its fleet.
He concludes: “We have become much more customer focused than we have ever been before as a business. We’re aiming at the best transit times and the best quality. And we have the capacity, so we are able to win large new business.”
“End of Runway”
One area of opportunity for DHL Express is the synergy with its sister company DHL Supply Chain, which is encouraging companies to outsource their distribution and supply chain systems, making use of the express network in the process.
DHL’s latest concept is the “End of Runway” logistics facility, with business customers encouraged to delegate their supply operations to DHL, and have their stock maintained very close to a DHL Express hub, so that products can be injected directly into the express network.
High value products or critical items can be ordered as late as 11pm and delivered by 9am the next day in major European cities.
DHL is showcasing this idea at a new EUR 14m facility next to its largest air hub, Leipzig. The 15,000 square metre facility has ample room for value added services such as product finishing and repairs, and for specialist areas including temperature sensitive and hazardous substance management.
Graham Inglis, the EMEA CEO for DHL Supply Chain, says that, given the troubled global economy, companies are seeing that outsourcing their supply chains is one way to cut costs while maintaining service quality.
“What this End of Runway facility enables is late cut off times and also speed to market – all in a one stop shop facility that can handle all the product needs.”
This article is an abbreviated version of the feature appearing within the December edition of the respected quarterly industry journal, Mail & Express Review. Click here for subscription details »
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