By Keith Norbury
The history of DHL Global Forwarding can be traced back to 1969, the year Neal Armstrong stepped on the moon. The history of Deutsche Post, DHL’s parent company, goes back much further, more than five centuries. Deutsche Post, the German post office, came into being in 1490, two years before Christopher Columbus first came ashore in the Americas.
Today, Deutsche Post DHL is a global company with nearly 53 billion euros in annual revenues that combines two distinct brands. One of those is still the German Post Office. The other is DHL, founded in San Francisco in 1969 and which became a wholly owned Deutsche Post subsidiary in December 2002.
DHL stands for the surnames of its three founders: Adrian Dalsey, Larry Hillblom and Robert Lynn. What began as a service to deliver documents by air between San Francisco and Honolulu grew into a multi-faceted business for moving and managing all manner of cargo.
That’s just one of the many threads of the company’s history, which can be found in detail on the DP-DHL website (www.dp-dhl.com). They include the story of Danzas, a logistics company founded in 1815 by a lieutenant in Napoleon’s Grand Armée. Deutsche Post acquired Danzas in 1999, according to the timeline.
It was through Danzas that Deutsche Post and DHL came to Canada. That occurred when Danzas acquired Air Express International, or AEI, which had operated in Canada since 1967. Danzas and AEI had been competitors for decades in Canada before integration of the two companies in 2000. In the next few years, the name changed from Danzas AEI, to DHL Danzas Air & Ocean, to its present name of DHL Global Forwarding, noted Gary Vince, acting Country Manager for Canada. Mr. Vince had worked with AEI since 1978, although he left the company before the merger, only to rejoin DHL Global Forwarding afterward. Lately, he has been filling in for Country Manager Donna Letterio, who has been on temporary leave, but was expected to return to work in November. Ms. Letterio played a key role in Canada being the first country to integrate the two companies, as Canadian Sailings pointed out this summer when she was named President of the Canadian International Freight Forwarders Association (CIFFA).
In 2006, Canada became the second country to bring Exel into the DHL fold.
“So this is where it gets a little bit complicated,” Mr. Vince pointed out. Deutsche Post, the umbrella company, operates the German mail office, as well as DHL Global Forwarding, DHL Express, and Exel, which specializes in supply chains.
Each is a distinct business unit. So, while DHL Global Forwarding and DHL Express operate in many of the same Canadian cities, their offices are in different buildings. Since DHL Global Forwarding, or DGF as it is also called, is a freight-forwarding group, its core product is business-to-business heavy freight. Meanwhile, DHL Express focuses on small-package service. And Exel offers warehousing and distribution services, such as four-wall single-facility operations to handle outsourcing of logistics for individual companies, Vince said.
Yet another Deutsche Post company, DHL Freight, operates exclusively in Europe. For ground transportation in Canada, DGF uses a variety of third-party trucking companies.
DGF has offices in Mississauga, Ottawa, St. Laurent, Quebec, Calgary, Edmonton, and Richmond, B.C. The company also runs dedicated custom-brokerage operations at the Canada-U.S. border in Windsor and Sarnia, and has agents in Halifax, St. John and Winnipeg, as well as at major border crossings.
“Every office at DGF has brokerage in it, [where] we offer custom brokerage services,” Mr. Vince said. “The only exceptions are Windsor and Sarnia, which are 100 per cent brokerage offices; they’re not involved in freight forwarding.”
At present, DGF has 386 employees across Canada. In 2011, the company handled 856,000 tonnes of cargo, both air and ocean freight, including 82,000 TEUs (twenty-foot equivalent units.)
Worldwide, Deutsche Post DHL has about 470,000 employees in more than 220 countries and territories. DHL Global Forwarding has 850 locations, employing about 30,000 people, in more than 150 territories and countries.
Like most freight-forwarders, DHL Global Forwarding is a non-asset based organization. “So we do not operate any of our own planes, trains, ships, none of that, as opposed to DHL Express which actually operates its own planes and its own vehicles,” Mr. Vince said. DGF does, however, lease two warehouses in Montreal and Toronto that have a combined area of 356,600 square feet. But whereas Exel focuses on single-customer, single-facility warehousing and distribution, DGF warehouses serve multiple customers.
“We offer a customer an air freight solution, including warehousing, distribution and customs brokerage solution as well,” Mr. Vince said. “We call it bundling of our services.”
DGF’s business strategy focuses on two areas: industry sectors and trade lanes. Among DGF’s prominent sectors are engineering and manufacturing, life sciences, high technology, automotive, and pharmaceuticals. Aside from the obvious major trade lanes of Europe-North America and Asia-North America, DGF is looking closely at emerging trades lanes, particularly between North and South America.
At present, Germany is the company’s number one international destination for imports, while the U.S. is the top destination for exports. Italy, the U.K., France and Northern China round out the top five for imports. Northern China, Belgium, France and Germany are the other four top destinations for exports. “As in any business, customers are looking for cost-effective solutions,” Mr. Vince said. “Air freight is obviously more expensive than ocean freight,” he pointed out, “so a customer that can manage inventory in a way that enables migrating from air to ocean can take advantage of “significant savings.””
Freight forwarding also involves finding solutions to customers’ problems, such as creative ways to protect pharmaceuticals from hot and cold weather. That can be as basic as wrapping insulation around a skid of cargo to more high-tech practices such as using TempTales to monitor temperatures continuously.
In 2011, DHL Global Forwarding generated 11.09 billion euros in revenues of Deutsche Post’s overall revenues of 52.8 billion euros. That was up from 10.72 billion euros in 2010, and Deutsche Post’s overall revenues of 51.4 billion.
For the first six months of 2012, Deutsche Post’s revenues were 27.1 billion euros, a 5.8-per-cent increase over the same period in 2011. Second-quarter 2012 revenues of 13.7 billion euros were 7.3 per cent higher than in the second quarter of 2011. By the end of the year, Deutsche Post anticipated EBIT (earnings before interest and taxes) of 2.6 billion to 2.7 billion euros, according to its first half of 2012 interim report.
Revenues from DHL Global Forwarding were 7.66 billion euros in the first half of 2012, a 4.1-per-cent increase over the 7.36 billion euros in the first half of 2011.
Without being able to delve into DGF’s financials, Mr. Vince said that business in Canada has gradually recovered since the recession. “Has it recovered to where it was pre-2008? I don’t know if anybody’s ever recovered to that extent,” he said.
As for the company’s outlook, he said he couldn’t begin to speak to that. However, he did cite life sciences as among promising growth sectors. “I think that as long as you go with the customer, and go with the business flows, then there’s absolutely opportunity for growth.”