Interview - DPD UK CEO Elaine Kerr reveals recording-breaking revenue growth amid challenging market conditions
DPD UK achieved record revenues in 2021 despite operational challenges such as driver shortages and Brexit impacts, and plans to launch several new services this year, CEO Elaine Kerr told CEP-Research in an exclusive interview.
Kerr was appointed CEO in June 2021 after working her way up through various managerial roles, including in customer relations, during a 28-year career with the parcel company. She has a clear passion for “putting customers of the heart of everything” and securing continued growth for the company, both domestically and internationally.
Now nine months into the top job, Kerr spoke exclusively to CEP-Research following The Delivery Conference 2022, about her vision for DPD UK and how the business overcame significant challenges in 2021 to break the £2bn revenue mark for the first time ever.
How have the first nine months gone as CEO of DPD UK?
“It has been very exciting but also very challenging! Business is great – it is growing and in 2021 we recorded nearly £2.1bn in revenue, which is a first for DPD UK. This is a huge milestone for the business and represents year-on-year growth of 9%.
“Equally, it wasn’t all plain sailing. We faced a lot of challenges last year like many other businesses in the logistics sector, most notably the continued impact of Brexit and the HGV driver shortage crisis,” she admitted.
“Looking back at 2020, our volumes were up by 50% and we have managed to sustain this and grow again in 2021. We invested heavily in 2020 to increase capacity and support that uplift in volume, which ultimately came about due to the Covid-19 pandemic. But now things are settling down again, we are working on continued growth. We are not going back to pre-pandemic levels.
“One of my clear visions going forward, which aligns with DPDgroup’s priorities, is a stronger focus on sustainability. With this in mind, we recently announced at The Delivery Conference the acceleration of our plan to have 25 all-electric delivery cities by 2025 by two years to 2023. This means that about 40% of our fleet will be all-electric by the end of 2023.
Tell us more about how DPD UK aims to be the UK leader in sustainable delivery.
“Sustainability has always been a key priority for us. We have been offsetting emissions since 2012 and since then we have been continually accelerating our sustainability plans. Although we are making good progress, we need to do more. The acceleration of the all-electric deliveries in cities initiative is just one way we are doing this,” she stressed.
“We have seen that sustainability has moved fast up the agenda over the past 12 months. I think this shift will continue, especially as the next generation has a big focus on being green and ethical. My 17-year-old daughter, for example, is very focused on sustainability and selecting the greenest options for parcel delivery, so we need to give people green choices, such as out-of-home deliveries.
“With this in mind, we have recently expanded our DPD Pickup network to 6,000 locations thanks to a new partnership with the Post Office, and we are also looking to roll out lockers in 2022. Both of which are in line with our green strategy.
“For the EV rollout, there are some key challenges that still need to be overcome. Cost is still high and the recent withdrawal of government subsidies in the UK linked to buying low emission vehicles has not helped. A U-turn on this would be very helpful. More support is also needed from local authorities and governments when it comes to charging infrastructure. The UK doesn’t seem to be delivering that fast enough currently. We need things like rapid charging units in loading bays to support our EV operations, for example.
Are you still feeling the impact of Brexit?
“Brexit probably was one of the biggest business challenges we have ever faced. I don’t think anything could have prepared us or our customers for what lay ahead with Brexit. Now in 2022 things are settling down and we are trying to move forward with our customers by launching new services and growing our international service again.
“SMEs faced the biggest challenges when it came to adapting to changes in customs and taxes following Brexit. The larger customers were much better positioned to understand the complexities of the new world of trading. A lot of SMEs meanwhile just made the decision to stop shipping internationally as it was just too complex for them.
“Our role now will be to support those SMEs and rebuild their confidence and trust in shipping abroad again. DPDgroup bought a stake in Aramex at the end of 2021, and this will help us, and our customers with cross border shipping. It all boils down to customer confidence and I believe we have the right tools and systems in place to help build this with SMEs again.
How are you tackling the HGV driver shortage crisis?
“The HGV1 driver crisis last year hit us hard, like it did for many other delivery companies. However, on Monday (February 7) we launched a new initiative to tackle this from within the DPD business. The initiative, called Warehouse to Wheels, will see around 300-400 people from the organisation be trained up as HGV drivers. We can do this as we have just been approved by the Driver and Vehicle Standards Agency (DVSA) to launch our own accredited driving school. This is a real step forward for us this year.
“It's called Warehouse to Wheels, but actually anyone within DPD UK that is interested in becoming an HGV driver can apply. This initiative is about encouraging people from within to pursue new career opportunities. We will use our existing training facilities on site to train new drivers and then, instead of them having to go elsewhere to gain accreditation, we can now issue it on site too. This will help us tackle the driver shortage and grow from within.
“In addition to this new initiative, last year we also took on 20 new HGV apprentices, which was a first for us. Furthermore, to enhance the people culture within the organisation we have also recently launched a new diversity, equality, and inclusive strategy, which will become part of our DNA going forward.
What does the year ahead hold for DPD UK?
“I am 100% a people person and throughout my whole career I have always dealt with customers first-hand, putting them at the heart of everything I do. I want to take this forward into my role as CEO and within DPD UK as a whole. The company is already doing some great things in this area, and we hope to build on this in the future.
“One area is by offering consumers more choice when it comes to delivery options. The new expanded Pickup network helps with this, and our recent acquisition of CitySprint will enable us to enter the same-day delivery market.
“This acquisition is still in the very early stages and the key focus for us over the next few months is to work closely with the CitySprint team to explore how our service offerings can complement each other. Our focus is on the customers currently and how we can introduce the two companies’ services to each other’s customers.
“We are also looking to introduce new services in 2022 – the details of these cannot be revealed just yet, but they will be aimed at e-commerce and smaller lightweight parcels. It is all about expanding the range of services we offer our customers.
In the 2022 MoneySavingExpert.com (MSE) delivery poll, DPD was narrowly pipped to the top spot by Amazon Logistics. How do you plan to take back that number one position?
“We were not very happy that we were knocked off that top spot and we are fighting to get it back next year! We hope to achieve this through a total focus on customer experience. Sometimes this can come down to the smallest of things. For example, when consumers receive a delivery, they can provide a ‘thumbs up’ or ‘thumbs down’ depending on their experience. For every thumbs down we receive we proactively call the consumer to address any issues as soon as they arise.”