Interview Synopsis

DHL – e-commerce growth drivers

  • Private Equity
  • Industrials
  • Global

Logistics growth is maintaining a steady pace following a pandemic-led boom. To understand how this has affected DHL, as well as providing more detail on how it operates, Third Bridge Forum spoke to a former divisional C-level executive from the company.

The Interview started with an outline of the main divisions: Post and Parcel Germany; DHL Express; Deutsche Post; Global Forwarding and Freight; and eCommerce Solutions. These units are “pretty autonomous”, a decision taken when it was more usual for companies to be headquarter-centric. “They’re structured differently, they operate differently, they compete with each other in some cases.”

In terms of structure, despite this autonomy, “they have a sales organisation called CSI, Customer Solutions and Innovation, who focuses on around… 120 of the globally largest customers. That sales organisation operates across all five divisions.” While there is another platform for medium-sized businesses in Europe and the US, certain customer segments with multiple requirements are required to contact the different divisions themselves. “That’s one of the areas that Deutsche Post DHL has struggled with for many years.”

Looking into e-commerce, the specialist remarked that they had never “seen numbers like we’re seeing at the moment in terms of parcel volume growth. It’s not so fantastic if you haven’t got your cost base at the right level.” To this end, DHL is well positioned, “and is now benefiting from having made future-orientated investments in warehousing and in automation, in aircraft, in vehicles, and many other areas, so they’re really getting great efficiency on how they handle those parcels.”

The specialist was also questioned about the parcel market’s potential growth. Prior to COVID-19, domestic e-commerce was growing at a rate of about 9% YoY, but this has shot up significantly, as has cross-border deliveries, albeit not to the same extent, they explained. The “million-dollar question” is how many shoppers will revert to bricks and mortar once the pandemic is over. In light of this, the former DHL executive estimated what growth would look like.

Other topics covered include UPS’s last-mile technology, DHL’s 3-5 year outlook and whether Alibaba could move to using its own delivery system.

To access all the human insights from Third Bridge Forum’s DHL – e-commerce growth drivers Interview, click here to view the full transcript.

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