Interview with Uwe Dörken, CEO of DHL

Question 1: Head of Deutsche Post World Net Klaus Zumwinkel recently said that his company’s biggest competitors.were not postal operators, but UPS, FedEx and TPG. Are the postal companies now your biggest competition or will they be?

Deutsche Post World Net (DPWN) competes in many different segments of the global markets for the flow of goods, information and money. So there are many different competitors in various segments and geographic regions. Only very few companies are attempting to bundle a global service offering on a scale that comes close to DPWN’s global service portfolio. UPS, Fedex and TPG are among the chief contenders in that field.

Question 2: Across the board, profits have been down. Can you explain why, and what repercussions this will have?

DPWN and DHL have consistently improved profits over the past years. Currently, our industry goes through challenging economic times, particularly in the US. These economic developments seem to take their toll on all major players in our industry.

Question 3: FedEx and DHL have formed alliances with USPS, TNT has an obvious alliance with the Dutch PIT Post, and Deutsche Post owns a majority of DHL. Do you see alliances and acquisitions as a continuing trend?

Alliances are a flexible tool to bundle forces and improve service to the customer. The trend in alliances between players in the world of transportation and logistics, both postal and non-postal, will continue.

Question 4: What benefits do you believe alliances with postal operators can bring?

Alliances with postal operators typically combine their strong domestic market position with a unique, often international service offering. It opens a new alley into the service providers’ network and gives the postal customer access to new products. Overall, it broadens the market offer and is therefore a positive trend for customers and service companies alike.

Question 5: Do you foresee a blurring of definition between the posts and the major express companies?

Of the four major express players, two (DHL and TNT) are already allied with postal operators. The other two (UPS and Fedex) have been allowed to build up dominant market shares in their segments in the US which make their domestic businesses very similar to a domestic postal business. I would argue that the blurring of definition has already occurred.

Question 6: What are your views concerning the liberalisation of the postal industry?

In Europe, the postal industry is clearly on the way to being completely liberalised. Germany, Holland and Sweden lead the charge on the postal monopoly. Despite resistance in other countries, reserved areas have been significantly reduced and are bound to diminish and ultimately to disappear in the years to come. This puts Europe a long way ahead of the USA.

Question 7: How far would you like to see the postal industry open up and do you believe express companies could fulfil some form of universal service obligation?

DHL and Deutsche Post World Net are in favour of liberalising postal markets. Free markets ensure a more vibrant market offering at better prices. Any service provider, whether private or postal, could fulfil universal service obligations if properly compensated for it.

Question 8: Some courier companies have been or are involved in litigation with postal organisations and against other express companies. Why so quick to turn to the courts?

It seems that the two major US players have a long tradition of litigious activity against posts. They are among the largest contributors to political lobbying activitie~ among all US businesses. As they were successftil in dominating US politics and courts, they are trying to export this methodology to the rest of the world, It remains to be seen if it will be successful.

Question 9: Where do you see your company position in the global market and what are your ambitions for the next five years?

DHL was the pioneer of express business and has been its global leader ever since. We work in partnership with our two major shareholders: DPWN, the world’s largest transportation and logistics company by revenue and breadth of service portfolio and Lufthansa, the leading global cargo airline. We want to establish ourselves as the leading global service provider for the demanding logistics, transportation and distribution customer.

Question 10: To what extent do you wish to infiltrate the postal market; could express companies be accused of cherry picking?

Postal markets should be liberalised as soon as possible so that issues like cherry picking no longer apply. DHL has alliances with many postal operators today, and DPWN group is active in many business segments traditionally classified as either postal or non-postal. DPWN group will broaden its presence in both groups of business segments in the future to achieve an outstanding service portfolio and performance for its customers.