DHL CEO Outlines North American Future

Speaking to a small gathering of journalists attending the National Industrial Transportation League (NITL) annual conference, Hans Hickler, the recently appointed CEO of DHL North America was enthusiastic in his view that DHL service levels must equal or exceed those of its two competitors, FedEx and UPS. DHL has concentrated on operational improvements which Hickler says benefit DHL by reducing cost and improving efficiency. Those same improvements are also beneficial to customers. In addition, the express carrier has been pushing a service culture through the organization.

Hickler was very clear in stating DHL had no interest in making an acquisition in the less-than-truckload (LTL) area.

Commenting on past losses DHL suffered after its bold expansion in the North American market he said not only of the acquisition of Airborne Express but continued operations after the acquisition, "like Hernando Cortez, we’ve burned the ships so it’s clear there is no going back." DHL, and deep-pocketed parent Deutsche Post, are clearly in the market to stay, he reiterates and so the work has gone forward to integrate expansions and acquisitions like Exel and provide a high service level.

The strategy and various tactics employed thus far to reach this goal are working, Hickler claims. He points to an independent study just released that shows DHL equaling UPS performance and slightly exceeding FedEx service levels on the industry benchmark 10:30 delivery product.

During the summer of 2006, a total of 14,000 shipments were made over each of the three carriers to test performance. All were shipped in exactly the same way on the same day at the same time, according to PA Consulting, which conducted the study. Reviewing the overall results, there was no statistical difference between UPS and DHL and only a slight difference between DHL and FedEx. Average delivery reliability in all origin/destination pairs used was 90.83% for UPS, 90.66% for DHL and 88.02% for FedEx.

The PA Consulting study also examined lane-by-lane performance. FedEx dominated in destinations in the South, achieving top delivery reliability from all origins to southern destinations. DHL and UPS evenly split the other lanes. UPS, for instance took the top spot from Midwest origins to Midwest and West destinations. DHL achieved best reliability in the Midwest to Northeast lanes and FedEx in the Midwest-to-South lanes.

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