DHL CEO reveals growth strategy: people, planet and profit

Deutsche Post DHL CEO Frank Appel has revealed that his employee engagement strategy includes sharing purpose and doing good.
In an interview with The Financial Times, Appel explained that he measures three bottom lines at the helm of the global logistics company.
Alongside financial performance, he also measures employee satisfaction, through an annual company-wide survey, and environmental impact via a carbon efficiency index.
Appel noted that it is crucial that companies have, and employees fully understand, a clear purpose, both for engagement and growth.
“What drives people is not top-line growth,” he said. “Our purpose has to be very explicitly understood by every employee. The more it is understood the better the performance of the company.”
Appel explained that his experiences working at consultancy McKinsey earlier in his career showed him that the best companies were those where engaged employees were making the lives of customers easier, and engagement can be achieved by recognising workers’ core needs.
“We have three needs,” he said: love, hope and purpose. “If you treat them properly, humans are very similar.”
DHL’s social efforts include its research and development into green – electric and emissions-free – courier vehicles, and its Go Help initiative, which utilises DHL’s logistics expertise to respond to crises such as the impact of Hurricane Maria in Puerto Rico in 2017.
“We cannot say, ‘Listen, our strategy is to make money and if we have time left then we’ll do something which is good for the society’,” he said. “Our job is to do something good for the society, and to do that, we have to make money – otherwise we can’t continue to invest.”

DHL CEO Appel on Amazon, Uber as competition, underestimating complexity

Speaking in a TV interview with news channel CNBC at the World Economic Forum in Davos, Switzerland, Deutsche Post DHL Group (DHL) CEO Frank Appel affirmed his confidence in the world’s largest courier company’s continuing relevance at a time when commerce and transport companies such as Amazon and Uber are reportedly gearing up to take a share of the global logistics task.
“If you are a quality leader, the edge of what is possible, you always have a right of existence,” Appel stated. “If you get lazy and think, ‘no one can hurt us’, then you get a problem.
When asked for his thoughts on what disruptors such as Amazon are underestimating as they try to enter the market, Appel noted that little is often thought of the effort that goes into ensuring quality of service. “To get [a parcel] to the consumer and bring it back is tremendously difficult, it’s undervalued because logistics are not visible,” he said. “I think what we do every night with millions of parcels is completely underestimated.” He added that he does not believe Amazon, which he describes as an important customer and partner of DHL, underestimates the task, and that is why they go to DHL to receive quality service. “But many people think that it is easy, that anyone can do it,” he added.
Appel expressed doubts about the viability of an Uber-style parcel delivery service. “Think about that we have an Uber solution, we have 100,000 parcels and everyone delivers five,” he said. The number of cars that would end up waiting in front of their depots would result in chaos, “That will never work,” he added. He conceded that the delivery model may well work for select, often rural, destinations, but not for the masses.
Appel further noted that he believes that delivery by Uber, or any other method, needs a human element, at least for the time being. “If…you call an Uber,” he said. “If it doesn’t show up, you call another one. If the parcel got stuck, what should the parcel do? It doesn’t speak, it doesn’t communicate, so some human intervention is necessary. I think that complexity is underestimated by many people.
When asked about his feelings on the likelihood of drone delivery becoming a reality, Appel stated that he thinks the technology has the potential to be use in the medium term, though not in the short term. “You never know,” he said. “You should prepare for the uncertainty. That’s also interesting about the current situation we’re in – complexity and uncertainty is good for companies who are willing to deal with that. That creates business opportunities.
“We make life for our customers easier, things are getting more complex. That’s a moment of truth for us. I tell our people, don’t worry, see it as a huge opportunity we can then gain, we can then grow.”
Image: Kandschwar at the German language Wikipedia.

DHL retreats from USA with 14,900 casualties

DHL.

DHL said its withdrawal from the US domestic market was "a very difficult decision", but "the right move".

(Image courtesy of DHL)

DHL Express has announced it would exit its US domestic-only services by the end of January 2009, in a desperate attempt to restore its balance sheet in deepest red. 

The restructuring of the company, Deutsche Post’s delivery business, will see all of its US ground hubs closing, dramatically slashing the number of stations from 412 to 103.

On top of some 5,400 jobs already cut since the beginning of this year, a further 9,500 US-based workers will find themselves jobless as the restructuring continues.

DHL Express global chief executive John Mullen said while the company had been progressively restructuring its US operations, the bleak market forced it to make “a difficult decision”.

“Given the current background of unprecedented uncertainty and risk in the global economy, we feel that it is critical and prudent to take additional measures to combat what we believe will be an extremely challenging 2009, and to do this ahead of time,” Mr Mullen said.

“Losses in US express revenue and volume were unsustainable. More had to be done to protect the interests of our customers and employees around the globe as well as our shareholders.

“It is the right move for our US express operations given the current economic climate and for the long run…we decided to focus on what we do best as a company, and that’s international shipping,” he said.

Here to stay, still

Despite the withdrawal, the company said it would remain committed to the US market as a continued US presence was essential to its entire global express network.

Nearly half of its top 200 business partners are based in the US, with US trade lanes representing half of its global volume.

“We are here to stay,” Mr Mullen said.

The remaining restructuring process will cost the company an additional $1.9 billion, bringing the total costs to $3.9 billion over two years.

By cutting its US domestic operating costs by 80 per cent to less than $1 billion, the company wants to keep losses from the market at $900 million, with the losses expected to taper down to $400 million by the end of 2009.

Stronger focus on international services

DHL’s operation overhaul will see the company dropping out of the US market race with UPS and FedEx, with the two key players set to take up almost 80 per cent of the market operations.

However, the company said the restructure would make its US international express service “extremely competitive”, with improved transit times.

The company’s international network builds on partnerships specific to regions, with AeroLogic and Lufthansa Cargo serving its European and Asian markets, Polar Air Cargo for trans-Pacific services, along with its self-owned Boeing fleet covering the trans-Atlantic region.

The restructure is not expected to have impact on other US-based services such as global forwarding and freight, supply chain and customer information services.

All international shipments into the US will still be delivered, while 99 per cent of the outbound shipments will be picked up.

Deutsche Post CEO Frank Appel said at a press conference in Bonn that stronger actions were needed to protect its delivery business from the economic storm.

“By taking a realistic view and defining clear actions towards reducing costs, I am confident we are now on the right track to secure the group’s long-term growth,” he said.

Deutsche Post posted results for the first nine months of the year. Its underlying earnings before tax from continuing operations slightly rose 1.3 per cent to 1.6 billion euros, with revenue in the period increasing by 2.3 per cent to 40.5 billion euros.

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