DHL Freight is planning to speed up deliveries in Germany with an enhanced service that couldgenerate higher yields as part of the road transport operator’s Europe-wide service
improvements.Jeroen Eijsink, CEO of DHL Freight Germany, told German transport newspaper DVZ that the companywanted to upgrade its basic Freight product to a “24 hour” Express Freight service. DHL Parcel isalready aiming to make next-day delivery as standard for domestic parcels, while DHL Express offersfaster time-based deliveries.
“We want to develop a rapid freight network with high frequencies, reliability and informationtransparency, similar to the business of our parcel and express sister companies,” the Dutch-bornmanager said. “And provide it at an international and national level.”
DHL Freight plans to establish deliveries within 24 hours as standard in Germany instead of theexisting 24/48 hour transit times. At present, the company contractually offers delivery within 48hours but about 80-90% of freight shipments are actually delivered within 24 hours.
Eijsink said that DHL, with its own freight network, is one of the few companies in Europe thatcan handle freight with express-like speed. To reach an almost 100% quality for the new DayDefinite product, DHL Freight has improved its network in Germany and created the technicalprerequisites, Eijsink said. For example, the company has reviewed the departure and arrival timesof its linehaul network and set up more permanent routes to replace charter and ad-hoc traffic.
As DHL Freight improves its services customers will have to pay for those. Nevertheless, Eijsinksaid he was convinced that customers are willing to pay a higher price for a better product. Thedemand for a 24-hour product exists anyway, he said.
This product upgrading is the first step for DHL Freight in a new pricing strategy. The companywants to increase the value of its products to achieve higher prices. Eijsink said he was sure itwas not realistic to pursue an exclusively price based strategy in the Freight market. Instead thevalue of the product has the key role in the future, he stated.
DHL Freight’s network in Europe comprises more than 170 road terminals in more than 40countries. The company recently extended its Eurapid service for day-definite less-than-truckload(LTL) shipments by adding 11 new terminals to the network, which now covers 75% of businessaddresses in Europe.
The company, which also offers multimodal transport solutions, is Europe’s second-largest roadtransport operator with an estimated 2.4% of the fragmented and highly competitive €174 billionmarket. In 2013, DHL Freight increased revenues by 1.3% to €4.25 billion, driven by growth inGermany, Eastern Europe, Benelux and France, and achieved stable gross profits, according to theDeutsche Post DHL annual report.
