DHL Express is seeing fast growth for day-definite shipments transported through the Middle Easton its regional road network, a senior manager told CEP-Research.
The company’s ground-based Economy Select product, offering slower but cheaper door-to-doordelivery to regional destinations than by air express, has boomed over the last two years, TrentEastgate, regional commercial manager for the road network, said in a recent interview inDubai.
“Volumes have doubled in the last two years,” he said. “This year we are looking at 20% growthboth for volumes and revenues.” DHL claims to have about 46% of road volumes departing Dubai,putting it ahead of Aramex and TNT, which offer rival road services. Key customer segments includeretail, especially large Arab trading groups, automotive and high-tech, including internationalbrands.
The Economy Select product, offering day-definite transit times, is targeted at less urgentintra-regional shipments. “We sell price and transit times,” Eastgate explained. Economy Selectrates are about 70% lower than for premium air express. From Dubai typical transit times are 2-3days to Qatar, Bahrain and Dhahran, 3-4 days to Riyadh and Kuwait, and a couple of days more tocities such as Jeddah, Amman and Beirut.
The largest Economy Select market by far is Saudi Arabia, with about 60% of volumes, Eastgatesaid. “At times we have 10 trucks a day going there,” he commented. Kuwait is the second-largestmarket. Egypt is currently only served on a full truckload basis but DHL aims to generatesufficient volumes to justify scheduled departures in future.
The product uses primarily the DHL Express Middle East Road Network for transportation. Thisnetwork covers 12 countries directly, including all countries on the Arabian peninsula as well asJordan, Syria, Lebanon and Egypt. There are air-road links to Iraq and Afghanistan via Bahrain, androad links to Europe through Turkey.
“We have no plans at present for connections to North Africa even in a normal situation,”Eastgate clarified. The security situation would make the services virtually impossible at presentanyway.
DHL has daily departures to all destinations, using a fleet of 270 trucks. These are mostlyoperated by two sub-contracted companies. The DHL-branded trucks are tracked and monitored byGPS and the sub-contractors’ performance is measured in line with company KPIs, Eastgate stressed.Most of the drivers are from GCC countries for reasons of border controls and visas.
“Borders are the biggest challenge,” Eastgate said. Customs clearance between Middle Eastcountries can sometimes be complex or unpredictable. As a result, DHL has installed six employeesat the UAE-Saudi border control at Al Batha to check that documentation for customs officials iscorrect and to prevent holdups or offloading of shipments. DHL also operates its own facility onthe Bahrain-Saudi border.
In addition, the company runs a maintenance facility in Bahrain to repair trucks damaged on theregion’s sometimes poor quality roads.
