DHL Express is planning a new international deferred service, more retail outlets and selectiveexpansion 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 betweenexpress and logistics.Price, who took over as head of DHL Express in Europe last July, said the operator was nowentering “a new phase” in Europe after completing integration of various past acquisitions andsetting up a single management in all express businesses across Europe. “It’s been a challengingprocess 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 itsinternational 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 continueto 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, Pricenoted that Europe was no longer so dependent on the US economy. “We are not seeing any signs of aslowdown,” he stressed. However, there was a trend towards slower international transportation, anda modal shift from air to sea or road where there were realistic alternatives. “That is why we arebeefing up our day definite international service,” he commented.
In its core B2B express market, DHL Express plans to introduce a new Day-DefiniteInternational door-to-door product under the name “Economy Select” to serve this fast-growingmarket segment, Price said. The lower-priced product was already trialled on Europe-USA routes lastyear. According to customer information, Economy Select offers delivery times of 3-6 days forsingle- or multi-piece shipments and pallets of up to 1,000kg to international destinations. Theservice will be supported by DHL’s new Trade Lane Management structure which is designed to focuson capacity management and two-way trade flows.
Within Europe, DHL extended Europlus, the equivalent day-definite product using road-basedtransportation, to Russia, Bulgaria, Romania, Turkey and Greece last autumn. More Central andEastern European countries are scheduled to be added this year. With coverage of 80% of Europe on anext-day basis for time-definite services, DHL is “ahead of the competition” while Europlus now hadcoverage “similar to TNT”, commented Thomas George, managing director marketing and sales ExpressEurope.
Meanwhile, DHL Express plans to extend its services for small businesses and consumers byexpanding the network of “Servicepoint” retail outlets and building up B2C services in selectedmarkets, 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 16,000within the next five years.
In the B2C sector, Europe is still behind the USA and Japan in terms of development, althoughthe UK was further advanced, Price pointed out. “There’s no definitive strategy for B2C acrossEurope. We will build where it makes sense and makes money.” The operator was “quite happy” withits 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 sharingfacilities. “In 2008 we will see a huge amount of gain between the two units,” Price commented. “Asglobal economies become more and more inter-linked, the supply chain is becoming more and morecomplex. Companies are more aware of the cost of logistics.”
Asked about the impact of the new European air hub at Leipzig, which is due to go into fulloperation at the end of March, Price said the new location meant DHL Express would be flying moreshipments within Europe and would enable it to improve transit times to growth markets in Centraland Eastern Europe. Service levels had not been affected by the transfer of Cologne flights toLeipzig last autumn, Price noted. “In January we had our best-ever service quality level,” he said.
