JOIN USTraversing the rugged terrain of economic recession while capturing opportunities thrown up banking on hopes of repositioning one’s fortunes is really a daunting challenge for a company engaged in logistics services.
Upping the ante with its global presence and product mix, DHL Express India (P) Ltd, a Subsidiary of Germany’s Deutsche Post, is calibrating its formidable position in the Indian market in anticipation of a spurt in manufacturing activity and a billion people’s thirst for consumption. In an interaction with Deccan Herald’s N V Vijayakumar, DHL Express India’s Vice-President – Commercial Sandeep Juneja explains DHL’s challenges and future strategy as it expands in India.
How would you position DHL in a country where logistical services are really in unorganised format?
In India the DHL group comprises of four entities, which are, DHL Express India Pvt Ltd (international air express business), DHL Global Forwarding (forwarding through land, ocean and sea), DHL Supply Chain (contract logistics, warehousing,) and Blue Dart Express Ltd (domestic air express operations). DHL Express started operations in India in 1979 and over the past 35 years, through the four entities we provide the entire spectrum of logistics services that a customer may require. Over the years we have built credibility and give primacy to superior customer service catering to the demands of our clients across India and the globe. Also logistics is currently 13 per cent of any business cost in India as compared to 6-7 per cent globally. If we bring efficiency into this segment, Indian products can be competitive globally. So we should give primacy to this sector.
What is your market share and growth forecast for India?
German Deutsche Post DHL’s global revenue is €55 billion in 2013. Of this, India accounts for 6-8 per cent. DHL Express has a market share of more than 50 per cent in India and we are registering double-digit growth annually. We are working hard to increase our contribution to the DHL Express global network. Besides access to 120,000 destinations globally with a presence in 220 countries, we operate out of 659 cities in India. We plan to raise this to 700 by the end of this year.
Even though there has been some slowdown in the economy due to structural and macro-economic challenges, the fundamentals of the economy remain strong and so the future of the logistics industry is really positive. I think the economy is poised for strong long-term economic growth. This growth will be accompanied by the Indian manufacturing sector becoming more global and sophisticated. All this would mean rapidly increasing demand for logistical services. This would also mean greater consolidation, greater emphasis on technology and skills, and greater focus on service quality in the logistics sector.
Can you elaborate on your strategy to tap the Indian market?
As per the guidance of Deutsche Post DHL global Chairman Frank Appel, we have drawn out a detailed five-pronged strategy for India, which is to develop free trade houses, create specialised industry verticals, offer products specific to small enterprises, cross-sell DHL brands and attract talent. Appel also announced in June 2012 that Deutsche Post DHL would invest up to €300 million (Rs 2,097 crore) in India over the next few years. We have also launched a programme in April called ‘Focus, Connect and Grow’ to leverage our reach and customer satisfaction.
How are you coping with logistical demands to meet customer expectations?
Over the years DHL Express has continuously invested in infrastructure to meet the growing demands of our customers. Each year we open new facilities or expand our existing facilities so as to support the growth of our customers’ business. Since the beginning of 2014 we have openend three new service centre facilities in Vashi, Ludhiana and Sriperumbudur and we expect to open more this year in Chandigarh, Mysore, Faridabad and Moradabad. Over the past two years we have also revamped and upgraded our entire ground vehicle fleet, which are the newly branded DHL vans that pick up and deliver customer shipments within cities.
Logistical management requires solid investment on human capital. What is your strategy in this regard?
Motivating our people is fundamental requirement and we invest in them as our most valuable assets. We made huge investments in training the entire global workforce of 100,000 employees, which includes over 2,100 employees in India, with the Certified International Specialist (CIS) training initiative, while all managers under the Certified International Manager (CIM) programme.
Do you have any specific strategy for Indian SMEs who account for 40 per cent of India’s manufacturing output?
The SME sector contributes close to 50 per cent of our revenues which speaks volumes of its importance to DHL. In order to understand their needs DHL Express India hosts knowledge forums for SME clusters in Tier II & Tier III cities. Over the past two years, DHL Express has hosted SME forums in over 20 cities to provide a platform to address not only their logistical needs, but also an understanding of specialist areas of HR, marketing, finance and technology.
DHL provides SMEs with a dependable world class supply chain into not only trunk lanes, but also developing countries and destinations like Africa and Latin America, which are not the easiest markets from a supply chain standpoint. With inhoused customs clearance, we provide 'specialised clearance support' for SMEs. Other than setting up cluster and lane solutions, DHL also offers SME-specific pricing contracts to provide value for money.
Can you elaborate on your air network as it stands currently?
DHL Express has extensive global air network. To serve this network, DHL Express runs one virtual global airline. Dedicated air operations are provided by own and partner airlines as well as contracted parties. They ensure that night flight and express time requirements are met and capacities sufficiently available and economical on high demand routes during peak periods.
Dedicated air operations are mainly provided by 18 own and partner airlines and with more than 250 dedicated DHL aircraft. In India, we operate our flights to New Delhi and Bangalore.