Deutsche Post DHL Expands Position in the United States and Pushes Transatlantic Free-Trade Zone
Frank Appel, the CEO of Deutsche Post DHL, was presented last night with this year’s John McCloy Award by the American Council of Germany in recognition of his work on behalf of transatlantic business relations
During the award presentation, the head of the world’s leading mail and logistics group called once again for a free-trade zone between the European Union and the United States to be quickly put in place. “The opportunity is there for the taking, and we should do everything in our power to seize it,” Appel said in regard to related statements made by political leaders on both sides of the Atlantic.
“It should also eliminate existing barriers to investment and market entry. The gains in efficiency resulting from this change would help both our customers and companies around the world. The world’s most important economic partnership could be fortified in this way.”
Appel said that such an agreement would produce at the very least 1 additional percent of growth in both regions respectively and generate innovative momentum in many industries and sectors. But the CEO noted that the creation of the zone posed a tremendous challenge. For this reason, a determined effort to create the zone is required on the highest political level, he added. “Such an agreement should not just address all types of trade barriers and promote the standardization of rules in important business areas,” Appel added. “It should also eliminate existing barriers to investment and market entry. The gains in efficiency resulting from this change would help both our customers and companies around the world. The world’s most important economic partnership could be fortified in this way.”
Appel noted that the benefits of a transatlantic free-trade zone would extend well beyond commercial gains: “In a closer partnership, we would have an opportunity to jointly tackle the world’s most pressing problems today – climate change and sustainable globalization that creates participation opportunities for more and more people around the world,” a confident Appel said.
United States: a core market with much potential for Deutsche Post DHL
For Deutsche Post DHL, the U.S. market will play an important role in the continued implementation of the Group’s global growth strategy. The trade lane between Germany and the U.S. operated by DHL serves major international companies in both directions. As part of this strategy, the Group’s DHL Express Division is focusing on time-definite international shipments (TDI). And the work is paying off: With daily revenue volume of more than EUR 3 million and over 50,000 shipments per day with these products alone, DHL is one of the leading express providers in the United States. Last year, the division boosted its revenues in the United States by more than one-third to over EUR 1 billion. With its Global Forwarding & Freight and Supply Chain Divisions, DHL is among the market leaders in the United States. In contract logistics, the Group maintains business relationships with a number of major companies in the country. In addition, DHL Global Mail offers a large range of national and international postal services in the U.S. market.
In the United States, the Group employs more than 35,000 people who work at over 800 locations. In a reflection of the U.S. market’s strategic importance, the Group has also invested heavily in the effort to expand its business there. As part of this effort, DHL’s fleet of delivery vehicles in New York was completely retrofitted with environmentally conscious drive systems in 2011. DHL Express also opened a new air-freight center at the Miami airport at the end of last year as a way to better serve the growing needs of customers regarding shipments to and from Latin America. Furthermore, the company has poured more than $100 million into the expansion and modernization of its air hub in Cincinnati. It recently invested nearly $50 million in the construction of an approximately 18,000 square meter sorting center with 280 new jobs. The new facilities in Cincinnati will officially go into operation on June 13.
“The United States is responsible for a large share of global trade,” Appel said. “For this reason, it is a central link in the global network of Deutsche Post DHL. In 2012, we generated double-digit growth in our U.S. revenues. We produce more than 10 percent of our consolidated revenues there. Given the country’s economic strength, our leading market position and targeted growth initiatives in all DHL divisions, we see tremendous potential for successfully growing our company in the U.S. market.”
DHL: leading international logistics provider in the Americas region
In the entire Americas region, which comprises North America and South America, the Group generated revenues of nearly EUR 10 billion in 2012 – with a strong upward trend. During this past financial year alone, revenues were boosted by more than EUR 1 billion. The Group currently employs more than 70,000 people on the American continent. All DHL divisions further cemented their leading market positions in the region. “DHL Supply Chain is by far the No. 1 in the Americas region. Global Forwarding is the market leader in air freight, and Express is at the head of the pack in the highly competitive market for time-critical international shipments in Latin America – we intend to further bolster this market position and continuously add market share,” Appel said in explaining the company’s ambitions in the region.
The foundation for this was laid by a far-reaching investment program. In the past two years alone, DHL has invested nearly EUR 500 million in the region. As part of these investments, new hubs for the express business were opened in Colombia and Mexico. In addition, the entire fleet of vehicles in Argentina was modernized and equipped with the latest security systems. One critically important element of the investment program in the Americas region is expanding the express network and, in particular, routes between America and Asia’s growth markets. In recent months, DHL has extensively extended its service range for intercontinental and intra-Asian routes. Through the addition of new connections between the United States and Australia, Japan and Hong Kong, the Express Division has recently made further improvements to its line of services and cut transit times among many destinations once again.
Intact growth expectations
Growth in the Americas regions is primarily being fueled by the international express business, an area where revenues in the international time-definite shipments rose by 18 percent over the past year. The revenue cleared off currency effects jumped by almost 11 percent during the past financial year. Among Latin America’s emerging markets, Mexico and Brazil specifically offer tremendous potential – for logistics in general and for the market leader with its three DHL divisions in particular. The key industries here include such global growth sectors as technology, the automotive industry, energy as well as engineering and manufacturing. “DHL has been active in the growth markets of the American continent since the 1970s and has gained unique expertise in the region as a result,” Appel said. “With services and products that have been especially tailored to meet the needs of customers there, we are exceptionally well positioned to generate long-range profitable growth,” Appel said in New York.