The world’s leading logistics provider has headhunted the man who played a large role in launching Google’s first Android devices in Asia Pacific as DHL’s new Head of Innovation at its first dedicated centre for innovative logistics services in the Asia Pacific region.
An exclusive Australian-first op-ed with John Pearson, CEO DHL Express
There is much speculation today about a retreat of globaliation, about the formation of rival economic blocs, about shorter supply chains, manufacturing coming back home, and the expansion of key domestic industries. In the middle of a pandemic, it’s certainly not surprising that pessimists and critics of globalization feel some vindication; anyone who has been skeptical of global connectedness before has found new reasons now. Still, it’s understandable that many people today are concerned about the future of the global economy.
We are in a serious crisis. The sharp downturn of the world economy as a result of the COVID 19 pandemic looks worse than the 2008 global financial crisis. According to the WTO, global trade flows could fall by up to a third this year. And predictions for capital flows are similar, with foreign direct investment projected to fall by as much as 30-40% in 2020/21. Cross-border travel is also declining sharply. The number of passengers flying internationally is expected to decrease by up to 1.5 billion this year. These and various other effects of the crisis are putting many people, companies and sectors of the economy to severe tests.
A boost for our immune system
Despite the gloomy prospects for 2020, I do not believe that we will see a permanent, massive decline in global connectedness after the crisis. I think globalization will take hold again. Even the most pessimistic scenarios do not have trade and capital flows collapsing. Instead, predicted declines foresee a return to levels that, in the 2000’s, were widely considered a sign of hyper-globalization. At the same time, the pandemic in many places has made it especially clear how important globalization is for our economic and social “immune system”.
During this crisis, many globally active companies have found themselves in a much better position than companies with a purely national or regional focus. This makes sense: companies active in one country only are entirely at the mercy of the local situation. Companies with a foothold in many countries, on the other hand, are stronger and more flexible. Early in the crisis, for example, global companies with business in China felt the drag of the first shutdowns. But this initial disadvantage turned into an advantage, with the recovery in China now providing a boost to companies doing business there. Every industry is different, of course, but international companies tend to be demonstrating more resilience at this time.
Open-mindedness protects against vulnerability
For similar reasons, I also believe that many of the calls for more domestic manufacturing and the renationalization of economic sectors are misguided. National supply chains are not necessarily more resilient. If anything, supply chains will need to be more diversified in the future, which means more globalization, not less. It certainly makes sense to take precautions and build up strategic reserves of critical goods for emergencies. But let’s not forget that the global division of labor remains vital to prosperity. It would make no sense – and prove unaffordable in the long term – if every country produced all its own medical products, for example.
I have no doubt that open, diverse societies will ultimately prove to be more robust in the face of crisis. Right now, we need globally connected research and the best medical knowledge from around the world to help get this virus under control. And we need more cooperation across borders, such as sharing free intensive-care capacity or sending teams of doctors to other countries. Indeed, barriers put in place before the crisis, such as customs duties on medical products, now threaten to exacerbate supply bottlenecks. As it happens, today’s tangle of export restrictions and import tariffs applies to many of the medical care and hygiene goods so critical right now.
My appeal for more openness applies all the more to poorer regions, some of which have just begun feeling the effects of the COVID crisis. Here too, access to world markets can mean greater resilience. For small businesses and micro-entrepreneurs whose local sales come to a standstill, for example, e-commerce (including cross-border shipping) offers a ray of hope. This requires a favorable environment, of course, including modern customs processes and less bureaucracy at the border. DHL has worked with international partners to provide support in this area for many years now.
A bit of normalcy in the crisis
Today we’re all experiencing first-hand how much our well-being depends on trade, functioning logistics and global digital connectedness. Imagine how this pandemic would have played out a few decades ago – without advanced e-commerce systems, without a powerful global IT infrastructure, and without technologies, platforms and smartphones to connect us. All these achievements make it possible for us to maintain much more continuity than would have been possible in the past.
Today, many employees also have the option of working remotely with colleagues and customers from their home offices. Managers can convene to make business decisions without having to be physically in one place. Family, relatives and friends can stay in close contact without seeing each other personally. Even when isolated, we have access to an infinite amount of digital knowledge, information and entertainment. E-commerce, in combination with state-of-the-art logistics, has become an important lifeline today.
I firmly believe that global connectedness has made our world more stable and less vulnerable in the current crisis. We should be grateful for it. And in the interest of the world’s social and economic “immune system”, we must make sure that globalization doesn’t suffer irreparable damage. The better we do this, the more resilient we will remain, and the easier it will be for us to pick up speed again after the crisis.
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In the Deutsche Post-DHL’s group 2019 financial results, the logistics company said it achieved record earnings but sees significant effects following coronavirus.
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DHL Express, Ford and electric vehicle maker StreetScooter have announced their collaboration on a new electric delivery vehicle.
The new “H2 Panel Van” will become the first 4.25 tonne electric vehicle with an added fuel cell, which will provide additional power and enable a range up to 500 kilometres.
In a first step, DHL Express has ordered 100 of the fuel cell vehicles, with delivery expected from 2020 through 2021.
For Markus Reckling, CEO DHL Express Germany, the new van fits in to the Group’s larger environmental goals. “With the H2 Panel Van, DHL Express becomes the first express provider to use a larger number of electric vehicles with fuel cells for last-mile logistics. This underscores our aspiration to be not only the fastest and most reliable provider on the market, but also the most climate friendly,” he says.
“We firmly believe that fuel cells will play an increasing role in electric-powered transport, since they can give battery electric vehicles the kind of range that is so important for so many customers,” says Schmitt. “With the Panel Van, StreetScooter begins yet another chapter in its proud history of innovation and enters into a new growth phase,” Fabian Schmitt, Chief Technical Officer at StreetScooter GmbH said.
The project is funded by the German Federal Ministry of Transport and Digital Infrastructure (BMVI) as part of its National Innovation Programme Hydrogen and Fuel Cell Technology (NIP II).
As part of its company-wide digitisation strategy DHL is further expanding the deployment of Smart Glasses and wearables to support vision picking processes in its warehouses.
As one of the first customers worldwide, DHL will now use the second-generation of Glass Enterprise Edition.
Augmented reality in the warehouse is driving a more accurate, productive and efficient picking process, says DHL.
While user-friendly and intuitive, hands-free picking is providing a positive experience and high approval rating among employees.
The successful use of smart glasses in contract logistics has also convinced other DHL business units. In the future, DHL Express will also use these wearables in its hubs.
“With the second generation of Glass Enterprise Edition, we can now provide our customers and employees with even more powerful, technically optimized smart glasses. The possibility of object recognition is also particularly promising for us in industrial applications. With the corresponding software, it is no longer just possible to read out barcodes, locate products and display the corresponding storage compartment; in future, also complex objects can be identified with the smart glasses. We expect this to lead to further productivity increases from which our employees and our customers will benefit equally,” Markus Voss, COO and CIO of DHL Supply Chain said.
Hirotec has been awarded the mechanical, electrical and fire services contract for all DHL facilities across Australia.
Hirotec is a privately owned national company specialising in the maintenance and engineering of integrated technical solutions comprising Mechanical, Electrical, Fire and Energy services.
Employing over 250 staff throughout Australia, the Hirotec customer base includes property and facility managers, property owners, industrial corporations and government departments
DHL was founded in 1969 and established in the United States of America. The Australian DHL Express office opened in Sydney in 1972 with just five employees.
DHL employs 380,000 staff across over 220 countries and territories worldwide and delivers over 1.3 billion parcels and packages per year.
DHL Group has increased both revenue and operating profit in the first quarter of 2019 compared with the prior-year period.
The company generated revenue of EUR 15.4 billion between January and March, an increase of 4.1 per cent on the previous year.
Operating profit (EBIT) was up 28.1 per cent to EUR 1.2 billion. In particular, the earnings contributions from the DHL divisions were again encouraging – while the surge in earnings was driven by non-recurring income from completing the Supply Chain partnership with S.F. Holding in China initiated at the end of 2018. Previously announced restructuring costs at Supply Chain and in the new eCommerce Solutions division slowed EBIT growth.
“The first quarter played out as we expected. We achieved growth in all five divisions. This shows that we are very well positioned in attractive markets and that our fundamental growth drivers are intact. E-commerce continues to boom all over the world and although some momentum has been lost, global trade is still on the rise, just as we expected for 2019. We are therefore on track towards our target of generating more than EUR 5 billion in EBIT in the coming year,” Frank Appel, CEO of Deutsche Post DHL Group said.