Deutsche Post DHL (DP DHL) is looking to extend its European parcels network to 35 countries by 2020.
Speaking a press conference yesterday on the occasion of the presentation of the German logistics provider's annual 2016 results, Jürgen Gerdes, the head of its Post-eCommerce-Parcel (PeP) division, said that within the group the network was known as the United Parcel States of Europe.
“At the end of last year, the UK joined us, extending the network to 21 countries. It's now 23 countries as Spain and Portugal were added from January 1 2017,” he said.
“We often refer to Greater Europe which is a total of 35 countries and by 2018-2020 we want to get the whole job done – one label, one brand, one IT landscape, and by then we should have an underlying process in place that is working very efficiently no matter where we are. For now, the focus is to add countries to the existing 23 and make the number up to 35.
“Europe is a fantastic region and whatever way you look at it, it's a market of several hundreds of millions of people – half the population of India or China. All that to say there is a lot we can do here.”
DP DHL CFO, Melanie Kreiss, underlined that even in those countries which were not yet in the scope of the parcels network in Europe, the group was still in a position to offer its services there.
“We have an express presence and have set up postal partnerships and so have some delivery options. We do have a base in all of these European countries and are able to decide on the best way moving forward,” she said.
Gerdes explained that DP DHL's European parcels network was currently split along two lines:
“One, where we are active domestically, such as in France, the UK, Germany, the Netherlands, Belgium, Poland and the Czech Republic and then another of countries where we don't have a domestic business but have a cross-border business.
“With respect to all of these 35 countries, we are establishing a holistic network which is standardised all over Europe and able to serve to the last mile by way of our own companies and through co-operation with local postal companies.”
With the press conference also the occasion for DP DHL to unveil its GoGreen plans which focus on achieving net zero logistics-related emissions by 2050, Gerdes was asked about the further roll-out of the PeP division's electric 'street scooter' vehicle fleet.
“We've 2,000 vehicles in Germany at the moment and100 in the Netherlands. We are poised to expand and while I don't want to say too much at this stage, we will double the number in Germany this year maybe even more.”
CEO Frank Appel highligted the importance of the street scooter as part of the GoGreen initiative and also to DP DHL's business model.
“We are very satisfied with the development of the street scooter. We are going to bring many street scooters on to the streets this year as in the past year and we are the only logistics provider to offer such electric vehicles in various cities. No other provider can do that and that's why it gives us a competitive edge”
The press conference also saw DP DHL's panel of senior executives quizzed about the 'explosion' in the B2C international parcel and express market and how the group was faring against rivals such as FedEx and UPS.
“B2C international really is exploding and there are massive opportunities for everybody. The likes of Amazon and Alibaba are the so-called high profile players but there's an opportunity for everybody. For example, a German bricks and mortar retailer can put its products online and anywhere in the world people can buy it,” said DHL Express chief, Ken Allen.
“Or to take another example, if you're a German expatriate working in Japan and you want something from Germany then you'll buy it from Amazon let's say, but they're not going to be able to stock every product in every country in the world. And that's driving a lot of our growth. We do a lot of business with Amazon out of Japan, for example, because Japanese ex-pats working in Europe or the rest of the world are looking to get goods from home and you can't stock that all over the world.”
As for competition in this thriving market from FedEx and UPS, Allen described DHL Express as “the most international company in the world not just the most international express company because we are truly global being present in every country. That's the basis for a very strong market position but at the same time know how difficult it is to be a global player.
“FedEx and UPS are great companies and I would never say anything (negative) about them. But when Fred Smith and Dave Abney wake up on a morning I'm sure the first thing they think about is US domestic because that's still the biggest part of their business.
“Yes they're coming into the market but I think most companies would be happy with (only) three main players in their market – FedEx, UPS and ourselves. We're the only global players in that market which is growing at a good rate. There are opportunities for us all in the international B2C market.”
Allen was also asked to comment on Amazon's plans to establish its own cargo hub at Cincinnati Airport where DHL has a long-standing air hub.
He replied: “Amazon is already flying in the US and uses our partners, ABX and Polar Atlas. We have the rights on a large chunk of land around Cincinnati Airport as we were the primary investor there in building out the infrastructure.
“And yes, Amazon wants to build its own hub in the United States. They had to approach us in Cincinnati as we have first rights on the land. And we don't see that we're going to be using that (land) in the foreseeable future. We've still got an area left for expansion (on the site) but our strategy would be to build up some of the other hubs in the US.
“Amazon is a customer of ours. We agreed that they could take that land. They had negotiations with Cincinnati Airport and they're going to go ahead and build a facility there. In the interim, while they're building that, we 'll be helping them on a technical basis,” he added but did not provide more details.
