DHL Express is targeting higher revenues and profits in Europe this year after stagnating in2005 following integration problems in various countries. The DPWN unit will focus on completing
integration, improving customer satisfaction and growing its business in Europe in 2006, accordingto board member Peter Kruse.DHL Express turnover in Europe effectively stagnated in 2005, rising just 0.1% to €11,746million. Operating profits in Europe were about €500 million last year, a similar level to 2004,Kruse said at the Deutsche Post World Net annual press conference on March 14. DHL Express’European land-based freight transport business, which amounts to about one-third of Express Europerevenues, improved both revenues and profits last year, he said.
But the overall Express Europe results were held back by general integration problems, andspecific problems in the UK and France, Kruse commented. In Britain, rising volumes, especiallyfrom strong B2C growth, had led to network capacity problems, falling quality levels and highercosts. New management had been appointed, and a clear improvement in profitability was expectedthis year, he said.
In France, DHL Express revenues dropped 12.5% last year and the unit made a loss. This wasmostly due to large-scale integration of the three networks of the former Ducros, Danzas Eurocargoand Arcatime companies, Kruse said. New management has just been appointed in France as well, andKruse said he expected much better results in France this year.
In Germany, according to the DPWN 2005 annual report, DHL Express increased revenue slightlylast year. While volumes and market share dropped for retail outlet customer products, the unitachieved growth in international parcel and freight products.
The main achievements in Express Europe last year were the integration of sales forces with asingle IT system, the launch of the pan-European B2C “Drop Points” strategy, the full integrationof the cross-border linehaul network and 90% completion of terminal integration. Priorities in 2006would be product enhancement, improved customer service, and lower network costs. There would alsobe country-specific “roadmaps” with local action plans, Kruse noted.
DHL Express still had growth opportunities in Europe, Kruse emphasised. Central and EasternEurope, for example, would be a focus this year both for express and freight transport. DHLcurrently had about a 20% share of the European express market ahead of La Poste, TNT, UPS andRoyal Mail, he noted.
