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.

Uber Freight to launch early 2017

Transport revolutionist Uber is quietly rolling out a new service connecting shippers with trucks, Uber Freight. News first broke on the new venture back in October 2016 an inside source – Eric Berdinis, product lead on Uber Freight – revealed the project to Business Insider. Berdinis shared that, while Uber’s future will feature self-driving trucks, its near future will certainly include trucks. “Even if you look preacquisition, Otto was always about reinventing transportation,” he said to Business Insider. “Even though we started with the announcement of the self-driving trucks, we were always intending to build a marketplace that would allow self-driving trucks to flourish.”
Since the service’s very quiet soft launch in October, a select few shippers and carriers have been able to use the service, with Uber planning an official launch in early 2017, Berdinis said. In mid-December 2016, Uber’s new Global Head of Uber Enterprise, Travis Bogard, wrote a blog entry outlining his plans for the company’s future.
“Uber’s mission is to bring reliable transportation to everyone, everywhere,” he said. “With Uber for Business, that means building technology that powers a wide range of transportation needs for business’ employees, customers, and goods: everything from business travel to daily commutes; from rides to company events and food delivery; and from caregiver and patient transportation to freight.
“We’re in the early stages of finding solutions to all of these business needs—and we’re going to do it more efficiently and ultimately save people money.”
When pushed for more details on the service – how, for example, load matching would be dealt with, and how automation factors into their vision – Uber told in early December that it didn’t “have any new information to share” at that time, and suggested that more information would be given in the new year.
At present, Uber Freight does have a sparsely populated website, yet information on the company’s plans remains scant and largely unconfirmed. Watch this space.
Last month, an anonymous source at Amazon leaked news of a similar ‘Uber for Freight’-type project in process at the commerce giant, slated for release in summer 2017. This year it will certainly be interesting to see the behemoths of the transportation and commerce industries take on the freight task with their new offerings, coming up against the logistics industry’s big players.

China logistics giant to build Asia’s largest air freight hub

Chinese private logistics company SF Express plans to build Asia’s largest air cargo centre, reaching areas responsible for 80 per cent of the country’s GDP within two hours, including Beijing and Shanghai.
The logistics industry in China is booming thanks to the popularity of e-commerce sites such as Taobao. According to the state-owned Xinhua News Agency more than 250 million people used courier services each day in 2016.
SF Express has announced that they intend to build an airport in Ezhou city, Hubei province, in central China by 2025. The facility will be designed to handle more than 2.6 million tonnes of freight and 1.5 million passengers, making it the world’s fourth busiest airport.
$100 million yuan ($19 million) has been invested in the venture by SF Airport Investment – 40 million yuan ($7.7 million) – and China VAST Industrial Urban Development Company – 60 million yuan ($11.6 million). Late last year, SF Airport Investment invested 470 billion yuan ($90 billion) in China VAST.
SF Express, the largest private courier in China, was founded in 1993 and began building its own fleet in 2009. As of late last year, the company owned a fleet of 36 aircraft, the Asia Times reports.
Charles Wang Guowen, director of the Center for Logistics and Supply Chain Management at the China Development Institute, told English-language Beijing based newspaper China Daily back in 2015 of the congestion experiences due to increasing passenger and cargo volumes. The congestion is not only at the airport, but also in the sky,” he said.
At the 2015 China Civil Aviation Development Forum, held in Beijing, Li Sheng, president of SF Airlines, a subsidiary of SF Express, said: “All of the more than 200 airports on the mainland are designed mainly for passengers. The need for express delivery and cargo is of lesser consideration,” he said. “Leading global express delivery companies must have such a national or even global air hub. It will increase the company’s overall efficiency and utilisation ratio of its aircraft.”

Kuehne + Nagel to manage Carcano Antonio’s in-house logistics

Italian company Carcano Antonio has awarded a six-year contract to Kuehne + Nagel to manage its in-house logistics.
Specialising in the field of aluminium foil rolling and converting, Carcano has two production plants in Delebio and Mandello, where it applies a fully integrated and traceable production process, from the raw material to the finished product.
In order to simplify the current logistics model and to increase operational efficiency, Kuehne + Nagel will now implement an equally standardised operational approach across the company’s entire logistics operations.
Within the partnership, the logistics provider will reportedly be responsible for the set-up and storage of coils coming from the manufacturing sites and picking and shipment to the customers, including domestic and international transport.
Thirty workers that were previously employed at Carcano’s warehouses are expected to be transferred to the in-house logistics operations carried out by Kuehne + Nagel in order to ensure a seamless transition of processes.
In addition, Kuehne + Nagel said it will support the design of the layout and set-up of Carcano’s new logistics centre in Andalo, which is currently being built.
“We selected Kuehne + Nagel thanks to its values, know-how, credibility and the constant attention paid to people: a careful choice of the right partner can ensure a total integration of the logistics in our industrial system,” commented Paolo Mari, Organization Development Director of Carcano.
Ruggero Poli, Managing Director of Kuehne + Nagel Italy said: “We are very pleased that Carcano chose Kuehne + Nagel to manage their logistics activities. This new contract is a result of our proven expertise in production logistics and motivates us to continue innovating and developing solutions that effectively support our customers in their day-to-day business challenges.”

DHL eCommerce launches new fulfilment centre in Australia

DHL eCommerce, a division of Deutsche Post DHL Group, has announced the launch of its Australian fulfilment centre in Sydney to support booming purchase volumes amongst Australia’s online shoppers.
“Nearly 75 per cent of total online spending by Australians goes to domestic retailers, with the value of e-commerce purchases expected to grow by nearly 50 per cent between now and 2020,” said Damien Sheehan, Managing Director Australia, DHL eCommerce. “As demand rises, online retailers need to overcome the traditional problems associated with shipping orders Australia-wide – particularly the significant distances between major cities that they need to traverse – if they want to maintain their competitive edge.”
“The addition of our Australian fulfilment centre gives our customers a far simpler, streamlined approach to managing inventory and last-mile deliveries, allowing them to focus squarely on satisfying their customers both during the check-out and shipment process,” he added.
The fulfilment centre will provide Australian merchants with fast, flexible shipping that consolidates inventory management and last-mile delivery from Sydney to major cities and regional hubs around Australia. The centre operates on the same service level agreements, management platforms, and customer support as all other parts of DHL eCommerce’s global fulfilment network, allowing Australian e-tailers to expand their sales into markets like the US, Mexico, Hong Kong, India and Europe with minimal onboarding time and hassle.
“E-commerce has gone borderless, and order fulfilment needs to do the same,” said Charles Brewer, CEO DHL eCommerce. “Our Australian facility adds another node to our standardised global network of fulfilment centres, eliminating the need for e-commerce merchants to hunt for new logistics partners as they look to expand their global reach.”
The centre’s design accommodates front-end integration with a range of marketplace and web-shop platforms, as well as multichannel order management and last-mile solutions. All of the centre’s services operate on a pay-per-use model with no capital spend or fixed costs.
“With cross-border e-commerce growing at an average of 29% per year until 2020, cost-efficiency and scalability are the critical issues for Australia’s online retailers,” said Malcolm Monteiro, CEO Asia Pacific, DHL eCommerce. “Whether it’s extending into new channels, offering more delivery options, or simply increasing inventory and warehouse capacity, Australian brands need fulfilment solutions that keep the operations lean no matter the delivery distances and volumes involved.”

Woolworths appoints Tesco veteran as Managing Director

Australian supermarket giant Woolworths Group has announced the appointment of Claire Peters as Managing Director, Woolworth Supermarkets.
Peters will lead a team of more than 115,000 team members across 992 supermarkets, reporting to CEO Brad Banducci. She brings more than 20 years of retail experience to the role, most recently as Chief Operating Office of Tesco Thailand, where she has overall responsibility for the supermarkets supply chain and logistics encompassing 60,000 employees across 1,900 stores and six distribution centres.
“After an extensive search for the right candidates, we are delighted to welcome someone of Claire’s calibre to our team,” Banducci said. “Woolworths is one of Australia’s most iconic brands. The strategy for our transformation is clearly defined and starting to deliver results. Claire has a proven track record in working with teams to deliver against key strategic objectives and she is the right person to work with our tea to continue the good progress we have already made.”
Peters will assume the role on 1 July 2017.
Image: Alpha on Flickr.

UPS acquires Freightex to grow in European 3PL market

United Postal Service (UPS) has purchased UK transport and logistics firm Freightex.
According to the US logistics giant, the acquisition immediately establishes UPS’s presence in the growing UK and European third-party logistics and freight brokerage market, and will help it launch a “new global and regional UPS growth platform from an established base of customers and carriers.”
“The UK and Europe are strategic 3PL freight brokerage growth markets for UPS and there is significant cross-border opportunity,” said Alan Gershenhorn, Chief Commercial Officer, UPS.
The transaction follows UPS’s acquisition of Coyote Logistics in August 2015, with UPS hoping to benefit from the two companies’ complementary business models.
“This acquisition provides UPS customers an immediate, knowledgeable and competitive UK and European presence. We intend to align Freightex with Coyote for greater efficiency and continue to invest for further growth,” Gershenhorn said.
“UPS expects to share the best system technologies, business processes, as well as leverage customers and carriers across the two units.”
According to a study by Grand View Research, the European 3PL market was forecast to reach $174 billion by the end of 2016, with the freight brokerage segment growing especially fast.
“Brokered shipping services often provide greater efficiency brought about by higher fleet asset utilisation when compared to operating dedicated fleets,” UPS explained in a media briefing.
“More than one-half million road freight carriers currently operate in Europe, presenting significant opportunities to expand UPS’s existing carrier base to create more value for customers and carriers from the advantages of higher equipment and staff utilisation.”
The Freightex business will operate as a wholly-owned subsidiary of UPS.

Aussie logistics sector lacking skilled supply chain/inventory managers

According to Hays’ latest Quarterly Report, covering January to March 2017, supply chain/inventory managers with tertiary qualifications and fast-moving consumer goods (FMCG) experience are in high demand in Australia.
According to the report, while there is not a lack of candidates for logistics roles, strong candidates with in-demand skills are in short supply.
There is also high demand for inventory controllers, supply chain coordinators, production managers and warehouse operators.
The Report found that the trend to employ tertiary-educated candidates is continuing, viewed by employers – it suggested – as more adaptable to market conditions and aware of new technology.
According to Hays, the last quarter of 2016 was very active, thanks to the transportation of goods in the lead-up to Christmas. “Following this,” it said. “We expect to see good levels of vacancy activity this quarter, with both temporary and permanent roles on offer.
“The manufacturing sector has improved, with operational logistics roles available. These include warehouse and transport roles as opposed to supply chain roles.
“With organisations continuing to outsource logistics, vacancy activity in 3PL companies will be strong.
“When they recruit, employers look for candidates with relevant systems knowledge. SAP is one of the most in demand systems.

Marcel de Nooijer appointed Executive VP, Air France-KLM Cargo

Marcel de Nooijer has been appointed Executive Vice President of Air France-KLM Cargo. He has been with KLM since 1995, serving as EVP of KLM Cargo since 2013. He previously held various commercial and operational posts, including that of Managing Director at Martinair Holland.
“I am pleased with the appointment of Marcel de Nooijer as Executive Vice President of Air France-KLM Cargo,” commented Pieter Elbers, President and CEO, KLM. “Thanks to his broad KLM experience, I am sure Marcel and his cargo team in Paris and Amsterdam will be able to exploit our strong AFKL network of belly, combi and full-freighter capacity in improving the quality of our service in the hyper-competitive cargo market. I wish him the best of success.”
Marcel will continue to fulfil his existing duties as EVP of KLM Cargo and Martinair alongside his new duties at EVP of Air France-KLM Cargo until further details of the new position’s responsibilities and organisational changes within the group are issued in January 2017.

K Line files lawsuit against APL Logistics

K Line has filed a lawsuit against Singapore-based APL Logistics (APLL), seeking compensation for damages arising from APLL employees’ “acts of disseminating false information relating to K Line.”
In a statement, the Japanese shipping line noted that a lawsuit had been filed in the Tokyo District Court in response to several emails sent by APLL personnel “strongly recommending” that clients terminate bookings on K Line and shift to other carriers because of a potential bankruptcy.
“K Line has decided to file a lawsuit, in order to restore its social confidence and clarify the social responsibility of a company such as APLL,” the statement added. “Based on its experience and achievements accumulated over many years since the commencement of service, K Line will continue to respond to customer demand and provide reliable and high-quality services.”
After the collapse of Hanjin in August, K Line was forced to address emails circulating damaging rumours about the company’s financial stability. The emails were found to have originated from APLL employees and the company admitted that its employees were found to be the source.
In a statement at that time, the company wrote, “APL Logistics Group states unreservedly that it is not our practice to comment on the financial position of other market participants; neither in a negative nor positive aspect.
“The APL Logistics Group therefore does not endorse the comments made by these employees.”

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