Global connectedness strengthens us – we need more of it, not less

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.

DHL takes vision-picking strategy global

Following augmented reality pilots in several regions, DHL Supply Chain, a subsidiary of Deutsche Post DHL Group, has expanded use of its ‘vision picking’ technology in warehouses around the world.
The smart glasses provide visual displays of order-picking instructions along with information on where items are located and where they need to be placed on a cart, freeing pickers from paper instructions, increasing efficiency and comfort.
In the international trials, DHL Supply Chain saw an average increase in productivity of 15 per cent, and higher accuracy rates, and the solution reportedly halved onboarding and training times.
“Digitalisation is not just a vision or program for us at DHL Supply Chain, it’s a reality for us and our customers, and is adding value to our operations on the ground,” said Markus Voss, Chief Information Officer and Chief Operating Officer, DHL Supply Chain.
“Customers have been very happy about the productivity gains and are equally excited about using innovative technology at their warehouses.”
Pilot programs took place across the US, mainland Europe and the UK over different industries including technology, retail and consumer.
DHL Supply Chain has reported that employees were found to be enthusiastic about using state-of-the-art technology and were pleased with how lightweight the smart glasses were, and how much more comfortable the process became with hands-free picking.
“We are very satisfied and happy that the pilot phase went so well and that we can now say augmented reality technology is one of our standard offerings at
DHL Supply Chain,” added Voss. “As one of the first logistics companies using the technology, we have truly established a new way of order picking in the industry.”
Following the success of its vision-picking program, DHL is looking into additional applications for augmented and virtual reality such as training and maintenance.

DHL and Ford to manufacture electric van

Germany’s Deutsche Post DHL Group is planning to collaborate with Ford on the design of a new electric van.
According to DHL, the chassis of the existing Ford Transit will serve as the basis for the project. It will be equipped with a battery-electric drivetrain and fitted with a special body construction based on DHL specifications.
“The start of production is scheduled for July 2017,” DHL said in a press release.
“Before the end of 2018, at least 2,500 vehicles will support the urban delivery traffic of Deutsche Post DHL Group. With this volume, the joint project will become the largest manufacturer of battery-electric medium-duty delivery vehicles in Europe.”
Both DHL and Ford named a strong focus on reducing emissions and creating new traffic solutions as the key drivers behind the project.
“I consider this partnership another important boost for electro-mobility in Germany”, said Jürgen Gerdes, member of the executive board of the Deutsche Post AG, the company behind DHL.
“This step emphasises that Deutsche Post is an innovation leader. It will relieve the inner cities and increase the people’s quality of life. We will continue working on completely carbon neutral CO2-neutral logistics.”
Steven Armstrong, Group Vice President and President Europe, Middle East and Africa at Ford Motor Company, added, “E-Mobility and innovative traffic solutions for urban areas are key focuses for us as we transform our business to meet future challenges.
“As the leader in commercial vehicles in Europe, this partnership plays perfectly to our strengths and in StreetScooter and the Deutsche Post DHL Group we have a partner with enormous competence and a worldwide network.”
DHL has already left its mark in the smaller van segment by designing and producing the emission-free StreetScooter in house. The joint Ford project will build on the existing production processes and could see DHL produce up to 20,000 units per year.

Deutsche Post DHL and Huawei to work together on IoT supply chain tech

Chinese ICT solutions provider Huawei has signed a Memorandum of Understanding with Deutsche Post DHL Group to develop a range of supply chain solutions for customers using industrial-grade Internet of Things hardware and infrastructure.
In a statement, DHL asserts that the company is looking at ways to increase its involvement in IoT technology.
“The Internet of Things could generate up to €1.77 trillion ($2.5 trillion) in additional value for the global logistics industry by 2025, enabling operators to better monitor and optimise their supply chain processes with low-cost networked sensors and devices,” the company said.
Under the MoU, Huawei and Deutsche Post DHL Group will collaborate on innovation projects focusing on cellular-based Internet of Things technology, which can connect large volumes of devices across long distances with minimal power consumption, delivering a more integrated logistics value chain by providing critical data and visibility in warehousing operations, freight transportation, and last-mile delivery.
“Spending on connected logistics solutions is expected to more than double between now and 2020, and many logistics providers including Deutsche Post DHL Group have already begun to explore Internet of Things applications in their supply chains, including everything from enhanced asset tracking to driverless delivery vehicles,” said Dr Markus Voss, Global COO & CIO, DHL Supply Chain. “This MoU will allow both Huawei and Deutsche Post DHL Group to tackle complex operational and business challenges with a powerful combination of world-class Internet of Things hardware, networks, and expertise in end-to-end supply chain management.”
The MoU will see Huawei make its Internet of Things devices, connectivity experts and network infrastructure accessible to Deutsche Post DHL Group and its ongoing efforts to incorporate greater sensing and automation capabilities into its warehousing, freight, and last-mile delivery services.
Yan Lida, President of Huawei Enterprise Business Group commented, “This partnership opens up an opportunity to improve the efficiency, safety and customer service offered by global supply chains in previously impossible ways, and defines how the Internet of Things will shape the fortunes of the logistics industry in the next few critical years of innovation.”

Labour violations case brought against Deutsche Post – DHL

A case has been handed to the German government alleging that Deutsche Post DHL has committed a series of labour violations which breach the OECD Guidelines on Multinational Enterprises.

The OECD Guidelines on Multinational Enterprises is a series of global standards “addressed by governments to multinational enterprises operating in or from adhering countries.”

A commitment to human rights is central to the Guidelines as is clear standards of conduct for industrial relations, including a respect for the right of workers to establish or join trade unions and the right to collective bargaining.

UNI Global Union (UNI) and the International Transport Workers’ Federation (ITF) are asking the German government to ensure Deutsche Post DHL (DP-DHL) “adheres to the OECD guidelines and its global workforce is treated with respect and dignity.”

UNI and ITF allege that DP-DHL has run “a sustained and coordinated strategy to limit workers’ freedom of association, including the firing of a group of workers during an organising campaign, under the pretext of “poor performance” and other vague notions of company policy,” of its workers in Turkey.

It also alleges that DP-DHL has adopted a deliberate strategy to limit unionisation in many countries including Turkey, Indonesia, Malawi, Vietnam, Colombia, Guatemala, Hong Kong and the USA.

The organisations say they have examined corporate documents and have conducted “extensive interviews to uncover the truth about the company’s working conditions and management practices.”

A statement released by both organisations states “DP-DHL has not given any concrete answers or assurances” about the allegations brought against them.

The General Secretary of the International Trade Union Federation (ITUC), Sharan Burrow said, “We want to see DP-DHL meet global labour standards. The evidence put forward in these allegations seems to point to an unacceptable shortfall across DP-DHL’s network.”

DP-DHL does business in over 200 countries, employing around 47,000 people worldwide.


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