Tag: DHL

Interview – DHL Express Europe plans new international deferred service

Posted by | Feb 26, 2008 | |

DHL Express is planning a new international deferred service, more retail outlets and selective expansion of B2C services to strengthen its market leadership in Europe, Express Europe CEO Scott Price told CEP-Research in an exclusive interview. He is also seeking more cross-selling between express and logistics.

Price, who took over as head of DHL Express in Europe last July, said the operator was now entering “a new phase” in Europe after completing integration of various past acquisitions and setting up a single management in all express businesses across Europe. “It’s been a challenging process to integrate all the acquisitions into our systems,” he commented. But DHL was now “ integrated into the most powerful network in Europe”, he said.

DHL Express’ European strategy was focused on strengthening the network and enhancing its international and intra-regional time-definite and day-definite products and services, Price said. “ My job is to ensure that we have a ‘Fortress Europe’, that we defend our leadership and continue to make gains. We are very focused on building up our position in our home market.”

In terms of macro-economic trends, and the potential impact of the slowing US economy, Price noted that Europe was no longer so dependent on the US economy. “We are not seeing any signs of a slowdown,” he stressed. However, there was a trend towards slower international transportation, and a modal shift from air to sea or road where there were realistic alternatives. “That is why we are beefing up our day definite international service,” he commented.

In its core B2B express market, DHL Express plans to introduce a new Day-Definite International door-to-door product under the name “Economy Select” to serve this fast-growing market segment, Price said. The lower-priced product was already trialled on Europe-USA routes last year. According to customer information, Economy Select offers delivery times of 3-6 days for single- or multi-piece shipments and pallets of up to 1,000kg to international destinations. The service will be supported by DHL’s new Trade Lane Management structure which is designed to focus on capacity management and two-way trade flows.

Within Europe, DHL extended Europlus, the equivalent day-definite product using road-based transportation, to Russia, Bulgaria, Romania, Turkey and Greece last autumn. More Central and Eastern European countries are scheduled to be added this year. With coverage of 80 pct of Europe on a next-day basis for time-definite services, DHL is “ahead of the competition” while Europlus now had coverage “similar to TNT”, commented Thomas George, managing director marketing and sales Express Europe.

Meanwhile, DHL Express plans to extend its services for small businesses and consumers by expanding the network of “Servicepoint” retail outlets and building up B2C services in selected markets, Price said. The present 7,000 Servicepoints, used as “first-mile” drop-off points and “ last-mile” pick-up points, are due to be increased to 11,000 this year and extended to about 16,000 within the next five years.

In the B2C sector, Europe is still behind the USA and Japan in terms of development, although the UK was further advanced, Price pointed out. “There’s no definitive strategy for B2C across Europe. We will build where it makes sense and makes money.” The operator was “quite happy” with its existing B2C services in the UK, Switzerland and Benelux, he said.

Another priority now the Exel integration had been completed was to “drive collaboration” between DHL Exel Supply Chain and DHL Express to maximise revenues and reduce costs by sharing facilities. “In 2008 we will see a huge amount of gain between the two units,” Price commented. “As global economies become more and more inter-linked, the supply chain is becoming more and more complex. Companies are more aware of the cost of logistics.”

Asked about the impact of the new European air hub at Leipzig, whi

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DHL appointed Official Express and Logistics Partner for IMG's Fashion Weeks

Posted by | Feb 26, 2008 | |

DHL has been appointed the official express and logistics partner for IMG’s Fashion Weeks around the world, a series of prestigious shows produced and/or represented by IMG Fashion in ten countries spanning four continents each year. Following the successful year of partnership with IMG Fashion in the U.S. market, DHL has now been selected as the official international express and logistics partner of these fashion events.

Leading its lineup of events this year were the January shows held in Milano Moda Uomo, Italy and the Mercedes-Benz Fashion Week in Berlin, Germany. Other shows will continue worldwide throughout the year. In Asia Pacific, the Lakme Fashion Week will be held in Mumbai, India, from 29 March to 2 April and from 18 to 23 October; the Australian Fashion Week will take place in Sydney, Australia, from 28 April to 2 May; and the Hong Kong Fashion Week will be held from 27 to 31 August.

As the world’s leading logistics service provider for the fashion business, DHL will use these events to strengthen its business penetration with the fashion, apparel and retail industries.

Asia Pacific has an increasing share of the retailing market in the global fashion industry. In the region, the top five markets of China, India, Japan, South Korea and Taiwan account for almost 23 percent of the global apparel retail market.

In addition to Asia Pacific, other cities in which DHL will sponsor fashion events include Milan, London, New York, Mexico City, Moscow, Los Angeles and Miami.

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DHL-Lufthansa freighter debut in 2009

Posted by | Feb 25, 2008 | |

DHL Express and Lufthansa Cargo’s new joint venture cargo airline AeroLogic will take off in the first half of next year with the 103-tonne B777-200 freighters. AeroLogic initially plans to operate a leased fleet of 11 B777-200s, mainly from its home hub in Leipzig, Germany, to/from major Asian markets, subject to obtaining traffic rights.

The first four aircraft are scheduled for delivery in 2009, starting in February, with four more to follow in 2010, two in 2011 and the final one in 2012.

DHL Express, part of German logistics group Deutsche Post World Net, will take the major share of the new B777F fleet capacity on weekdays to boost its Asia-Europe air express network. At weekends, Lufthansa Cargo will take over the main responsibility for filling the aircraft, this time with freight, on both scheduled and charter services, mainly on European routes to/from Asia and also North America (New York and Chicago).

In terms of aircraft block hours, the anticipated split will be 74 percent express network operations and 26 percent general cargo services. Capacity-wise, the weekly split will be DHL 61 percent, Lufthansa Cargo 39 percent.

DHL Express chief executive officer of global aviation, Charles Graham, claimed the advent of the B777F operations would speed up overall transit times for the Europe-Asia express traffic. “The percentage of traffic in both directions between Europe and Asia that we are able to pick up and deliver on the other continent before noon on the second day will increase to something like 80 percent,” he said.

AeroLogic, which is capitalised at USD74 million, is targeted to generate revenue of USD148 million in its start-up year of 2009, rising to USD 444 million in 2010 and USD 814 million once fully operational in 2011. The new airline will lease its first eight B777Fs from a company called Deucalion Capital VII, which is managed by German financial institution DVB Bank.

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Exit of Zumwinkel may end DHL push into US

Posted by | Feb 25, 2008 | |

The abrupt exit of Klaus Zumwinkel, chairman of DHL parent Deutsche Post, has heightened speculation that DHL may sell its struggling US business.

Zumwinkel tendered his resignation on February 15, following raids of his office and residence by German tax authorities the day before. He is being investigated for alleged tax evasion of around USD 1.4 million.

With his November retirement day in sight, Zumwinkel left under a cloud after leading the company for 18 years. He turned a postal outfit into an USD 88 billion logistics giant.
Throughout his tenure Zumwinkel was seemingly untouchable, lording it over Deutsche Post. But in recent months he came under mounting criticism, most of it directed at DHL’s struggling US expansion. Having acquired Airborne Express for about USD 1 billion in 2003, the company was trying to establish itself as a third force in the US market behind UPS and FedEx, but the operation has produced a flood of red ink, despite several efforts and heavy investment to stem the flow. According to some estimates, DHL could lose D 900 million in the US this year alone.

The first salvo against the US strategy came last November, when investment firm Bear Stearns concluded that DHL stood no chance of producing profits in the US in the foreseeable future and advocated a retreat from the US market. Subsequently a second Wall Street firm argued that DHL should abandon the intra-US business.

Since then, speculation has been swirling around DHL that it might sell its US business.
Although the new Deutsche Post chief Frank Appel has pledged to focus on the loss-making US unit and chief financial officer John Allan, whose contract has been extended by two years until the end of 2010, pledged to improve performance of DHL in the US, rumours have been leaking out of Deutsche Post’s headquarters that a number of options were under consideration to end the losses in North America.

One scenario that has been bandied about sees DHL handing over the intra-US business to FedEx, which could in turn have DHL handle its intra-European traffic. FedEx and Deutsche Post have declined to comment on these speculations, but sources close to DHL place the origin of this rumour in the Deutsche Post management.

Selling the US arm of DHL Express to FedEx seems unlikely, though, as FedEx has no need for the infrastructure that its smaller rival has built up in that market. Moreover, an outright sale might face legal obstacles. A report by Bear Stearns argues that anti-trust reasons would prevent FedEx from buying what amounts to 11-12 percent of the US air express market.
“However, we suppose FedEx could purchase DHL’s smaller ground business and form some form of partnership with DHL to deliver some portion of their air express packages,” the report concluded.

While not commenting directly on rumours of a FedEx deal, Allan declared that “there can be no question of exiting the US business. Any options which include a withdrawal can be completely ruled out”.

Deutsche Post has repeatedly stressed that its presence in the US market generates a host of international traffic, such as flows from Asian customers to North America. Allan declared that the US express business is a key management priority for Deutsche Post.
“We are looking at a variety of options to improve performance. In doing so, we are committed to maintaining a significant presence in the US market, which remains of strategic importance to the group,” he said.

The first salvo since these comments came on February 12, when DHL Express USA announced a plan to eliminate some 600 jobs. “This action is one of several measures we are taking to improve our competitive position in the US market, which is strategic to our global growth plan,” said Hans Hickler, CEO of DHL Express USA.

But profitability is in short supply. On January 24, Deutsche Post announced it would take an USD 874 million write-down of the value of its express business in the Americ

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Geojit Financial Services is bullish on Blue Dart, Abbott India

Posted by | Feb 25, 2008 | |

Blue Dart is an 81pct subsidiary of the DHL Group, Shah said. “The company has posted excellent December quarter results. It plans to compliment and widen service offerings. It has launched a new surface express product in CY07 called Dart Surfline, which is expected to grow 40-45pct per annum.”

Abbott India is a 65pct subsidiary of Abbott Inc USA, he said. “The company’s numbers are in line with expectation. It provides healthcare services through business units. The parent company Abbott Inc is a leading player globally and is focused on pharma.”
Q: What makes you so bullish on Blue Dart? Is it the sector as a whole or the fact that they had a stellar set of December numbers?

A: It is basically the sector considering the kind of growth potential. If you consider the number of MNC plans that are coming into India, logistics business is supposed to grow going forward from hereon. Considering the capex cycle that corporate India has, the entire sector in logistics looks quite good, whether it is Blue Dart or certain other reasonably low-end players.

Blue Dart is a 81pct subsidiary of DHL and is one of South Asia’s most integrated courier and logistics company. It also has the benefit of covering 220 countries, considering it is an 81pct subsidiary of DHL. Also, the distribution service spectrum is about to witness a fair amount of growth from hereon.

Blue Dart has been in the domestic market for a very long time and also has the expertise to deliver. Considering that companies like Tesco, Wal*Mart and Carrefour are opening their retail outlets in India, the services provided by Blue Dart would definitely tend to grow, keeping in mind the kind of retail boom we are seeing.

We have a price target of Rs 750 on Blue Dart over a one-year timeframe. Possibly, if you have a stretched out timeframe, it can even get better from hereon.

Abbott India is a 65pct subsidiary of Abbott Inc. USA. Abbott India provides healthcare solutions to its three segments – primary care, specialty care and hospitality care. The parent company Abbott Inc has got good number of products in its pipeline and is well poised to take advantage of the patent when it unfolds in India.

Considering the kind of growth that the healthcare business can possibly see in India, I think the topline and bottomline would definitely benefit. Abbott could possibly well be poised to leverage the parent company’s product line-up. We have a price target of about Rs 630 with a one-year timeframe.

Q: The volumes on both these stocks are dismally low. How would you explain the kind of price rise or interest in the counters on such low volumes?

A: With Abbott especially, it has traded only on BSE. In case you are a one-year plus kind of an investor, then these kinds of volumes should not make much of a difference, because you are not taking a trading call over here. The volumes are definitely low on both Abbott as well as Blue Dart. But if you have a delivery perspective and a one-year timeframe, then these kinds of low volumes should not deter you from making an investment.

Of course, the sectors that both these companies are placed in, tends to grow from hereon, on the domestic consumption growth story. So, considering these two points, volumes should not deter you from making an investment call on these two companies.

Q: Any disclosures?

A: No personal holdings. But since our company has got a buy report on both, our clients might be holding their positions in the two companies

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