DHL Express wants to overtake UPS as the international express market leader in Germany aftercompleting a three-year turnaround but will exit from the loss-making domestic parcels business in
Austria, a top executive told CEP-Research.The express operator, which does not disclose revenue figures by country, has a German marketshare of close to 30% and is profitable, Wolfgang Albeck, CEO Germany and Austria, said in aninterview at last week’s transport logistic trade fair in Munich. The company was overtaken asGerman express market leader by UPS several years ago.
But Albeck stressed: “I’m very sure we will close the gap. We are growing more strongly than themarket. That means we are gaining market share. It’s our aim to become the market leader ininternational business before 2015.” The company did not want to win business through low prices,however, he said.
DHL Express Germany is now emerging from a three-year turnaround programme following itsseparation from the much larger DHL Parcel Germany business in 2007. “This was a correct decision.Express had been under-represented and we have developed well since then,” he said. “We havecompleted the three-year change programme. Now we have a phase of stability. There will not be anybig changes in the next 2-3 years.”
Albeck said that customer demand for express services was picking up and although some customerswho had downtraded to parcel services might not return, this business would at least remain withinthe Deutsche Post DHL group in Germany. Healthcare was a growth sector and DHL had recently wonback a major healthcare customer after 18 years, he disclosed.
DHL Express Germany has focused strongly on improving customer service and ensuring high levelsof operational performance as well as cost control, he explained. “We are not trying to cutcosts at any price. We have to ensure our quality.” Service levels had improved significantly since2006/07, he stressed. Features such as advance notification of delivery changes had improvedcustomer service, he noted. The priority was to improve customer confidence by providing reliableand stable services, he added.
Products had been enhanced in recent years with new next-day express services and DHL nowoffered delivery by 12:00 to about 80% of EU destinations. About half of DHL Express’ Germanvolumes are international and the rest are domestic.
Operationally, a high proportion of domestic express consignments are transported by road ratherthan flown, he noted. “We are trying to transport as much as possible by road in Germany becausethis is cheaper than air, can be quicker and is more environmentally friendly,” he explained.
In Austria, DHL Express has decided to exit from the loss-making day definite domestic expressparcels business. “We are getting out of the business. You cannot earn money with these prices,”Albeck declared. The company would focus on the international express business where it is theclear market leader. DHL Express Austria as a whole had been profitable since 2009, hestressed.
At a European level, Germany is one of DHL Express’ top three markets alongside the UK andFrance, where the businesses have downsized substantially by disposing of their loss-makingdomestic express activities.
* DHL Express Germany has won Gold Status in this year’s EMS Performance Awards which were heldduring the annual UPU Postal Operations Council meeting last week. The company was honoured for itshigh performance level, scoring between 98% and 100% in areas such as delivery and responding toqueries.
