“Culture and people make a massive diff erence. Technology is just an enabler in allowing the couriers to orchestrate a great delivery experience. If we create happy employees, they will be able to deliver the smile in the last mile. We work really hard to create a great place to work for our employees because we believe great people, with the right tools and a culture of customer centricity win the game,” shares Charles Brewer, CEO, DHL eCommerce, during an exclusive interview…
You have a vast & varied experience in the logistics space. What has the transformation journey been like?
Oh, the transformation has been massive & huge. When I started my journey at DHL Express 35 years back, global shipping was unheard of. Back in those days, we never had mobile phones to connect with people. In those days, when just conveying information used to take more than 24 hours, today it’s a matter of seconds. WhatsApp, mails and SMSs have made lives simpler. Speed, the ease of doing business, connectivity, and the ability for companies to go global has changed beyond recognition. Specially for start-ups today who are trying to do business globally, it has become so much simpler and easier.
On the other hand, the process has become so complex for us as logisticians to deliver products & parcels to our customers in a seamless manner. DHL as a group has connected the world and has made it simple so much so that sometimes I have to make my team realize that the management of the entire back-end process is so complicated while simultaneously making each and every customer happy and loyal.
Today, e-commerce, innovation and digitization are huge game changers for the logistics sector globally, fueled by the consumer’s increasing demand for speed, visibility, convenience, control and choice. In the coming years, we will see more automation, more personalization, and more innovative solutions.
How has the journey of associating with DHL for the past 35 years been?
At DHL, I first started as a Customer Service Agent and later on moved to various roles including Country Manager in the Philippines and Malaysia. I love that DHL is the most international company in the world, and that it has given me the great opportunity to be based in Europe, US, Middle East, Africa, Asia Pacific and had a great chance to visit over 110 countries in the world.
In 2014, our Deutsche Post DHL Group CEO Frank Appel announced our Strategy 2020 and launched DHL eCommerce, a new division in the group, aimed at being the e-commerce logistics Provider of Choice, Employer of Choice and Investment of Choice globally. E-Commerce is very close to my heart — it represents what I love — excitement, possibilities, combined with the beauty of logistics. So, when the opportunity came up to head DHL eCommerce, I jumped right at it.
How is the logistics diaspora changing with the onset of various newer channels of growth?
We have seen many industries already being disrupted – retail, transport, hospitality, banking, etc., and logistics is now undergoing the next wave of change. It is an exciting time for logistics and I’m certain logistics in the next 5 years will be very different to what it is today.
A lot of changes are being driven by three factors – consumers expectations in terms of speed of delivery; convenience as to how, when or where they want the product to be delivered; and enhanced predictability to track & trace their parcels or goods. In a nutshell, it’s all about managing 3Cs – Convenience, Choice & Control.
Additionally, the sellers’ focus has also shifted from making the website appealing to now delivering the goods to the consumers in the shortest span of time. They are also investing heavily into o¬ering unique delivery experience to their consumers. Companies are using data analytics to get information useful for logistics companies to deliver happiness to consumers. Because at the end of the day, you are not just working to deliver just another parcel, you are actually bringing smiles on their faces by delivering them the desired goods they want and, in the time frame they desire.
Consumers are becoming more mobile-dependent thanks to a host of technological advances making it easier to shop online. As m-commerce becomes the future for a complete online shopping experience, it is no secret that businesses are investing in this next big trend. From browsing products online, to going through the check-out process, to .nal-mile delivery to the doorstep, it’s important to create a ³uid shopping experience across multiple platforms in order to keep customers coming back. The logistics companies are driving a big part of change in making this happen and that’s what our tagline says, “Delivering the Smile in the Last Mile”.
That brings us to our next question… How do you aim to live up to the tagline of “Delivering the smile in the last mile”…
Culture and people make a massive difference. Technology is just an enabler in allowing the couriers to orchestrate a great delivery experience. If we create happy employees, they will be able to deliver the smile in the last mile. We work really hard to create a great place to work for our employees because we believe great people, with the right tools and a culture of customer centricity win the game.
How is the growth of e-commerce fueling the logistics industry globally and what significant role does DHL intend to play?
E-Commerce is one of the fastest growing industries with growth rates forecasted domestically of more than 9% and cross-border of over 27% by 2020. It’s hugely embryonic and still enormous. To o¬er you stats, e-commerce holds a mere 2-4% of India’s retail sector. But the dynamics are soon going to catapult if we go by the recent Morgan Stanley study which predicts that online retail in India is estimated to grow over 1,200% to $200 billion by 2026, up from $15 billion in 2016. That will be 12% of India’s overall retail market. One can imagine the kind of business opportunities it will generate for logistics players. Crossborder eCommerce is also growing exponentially globally.
DPDHL Group sees e-commerce as a significant opportunity; as such we will play a hugely important role in the growth of e-commerce, and e-commerce will play a hugely important role in the growth of DPDHL Group. E-commerce as a subject sits very squarely in our Strategy 2020. The Group envisions to be the leader in the e-commerce related logistics activities.
India’s booming e-commerce market, coupled with the government’s implementation of GST and greater ease of claiming benefits like MEIS for cross-border shipments, has made e-commerce exports more attractive and business-friendly than ever before. We are positive of the growth and are hugely committed to enable Indian e-tailers to fully capitalize this exciting e-Commerce market.
In this regard, establishing Distribution Centers allows DHL eCommerce to provide e-tailers with its extensive portfolio services tailored for the e-commerce industry, such as Packet and Packet Plus will enable economical shipments worldwide and DHL Parcel International Direct that offers a favorable transit time from four to seven days for deliveries to the US, UK and Australia.
How do you enhance the customer experience and what are the innovative initiatives you have taken to amplify the same globally and in India?
In e-commerce, the consumer will lead the way and drive the way businesses operate. Earlier a 3-5 days delivery window would seem incredible to consumers, but the same proposition today would be a big no-no for them as they are seeking on-demand delivery. If you need to be sustainable and fast paced, you need to quickly fill up this void by making things available to consumers when they want and where they want. Having said that, omnichannel wave is here to stay because there would be days when consumers would like to go for the ‘touch & feel’ therapy too. Coexistence of online & o·ine platforms will be a big thing going ahead and how exceptionally well you as logistics service provider manage it, will decide your share in the market.
India has been identified as a key market for DPDHL Group and we are leveraging our experience and successes globally and customizing our services to meet the needs of the Indian market. We are con.dent that our new crossborder solutions will provide an added boost to the growing e-commerce industry in India. We are investing in our people, network and service to ensure we win this market and remain the market leader through our divisions Blue Dart – part of DHL eCommerce, DHL Express, DHL Global Forwarding and DHL Supply Chain. We see huge potential in India, and we announced last year that we will invest more than EUR250 million in India by 2020. We are a global company with a very strong local presence, leveraging our global capabilities.
We are aggressively expanding our network to reach every Indian home by December 2018 to enable fast, efficient and reliable deliveries for both B2B and B2C customers. We are well on our way to cover all pin codes in India. The initiative is one of the biggest drives undertaken to expand Blue Dart’s reach to every corner of India and aims to reach 19,100+ pin codes by December 2018. As part of the expansion, Blue Dart has opened over 939+ new facilities to cater to the large consumer base in rural and remote locations.
India presents a huge growth opportunity for us as it’s still a very nascent stage and as I said, we have just started… we have many more miles to achieve.
How is your company looking to ace the digital world?
We started our digital journey in the year 2014, the same year our Group’s Strategy 2020 was announced. Since then, digitization and innovation are big focus areas for DHL globally and we will leverage technology and digitization to stay the market leader. This includes ‘small’ innovation initiatives for productivity gains (e.g. automation, robotics) and ‘big’ innovation ideas such as new business models.
Big innovations are the things that disrupt what we do. For instance, StreetScooters – we currently operate more than 6,000 StreetScooters in Europe. We operate electric vehicles and alternative delivery vehicles in most major cities around the world. We are slowly and surely taking vehicles o¬ the road to realize our Zero Emission vision. We believe that if we don’t wake up to the cause, someone else will disrupt the space. Rather than being a laggard, we aim to be the leaders and the disruptors in the space.
Small innovation is about process, performance and customer expectations improvement. Technologies like big data, arti.cial intelligence, robotics, all fall under this category. Our fulfilment centers globally deploy robotics to enhance visibility and efficiency. DHL has also successfully run a pilot test including robot technology for collaborative automated order picking in a DHL Supply Chain warehouse in Unna, Germany. The robot called EffiBOT, from the French start-up Effidence, is a new, fully automated trolley that follows pickers through the warehouse and takes care of most of the physical work. It is specifically designed to work safely with and around people. The warehousing staff highly appreciated the option to work hands-free and not having to push or pull heavy carts.
We have also successfully carried out a pilot project testing smart glasses in a warehouse in the Netherlands as a first step in the Augmented Reality journey. In collaboration with DHL customer Ricoh and leading wearable computing solutions expert Ubimax, we implemented ‘Vision Picking’ in warehousing operations. As we speak, we have successfully completed our global augmented reality pilots and are expanding our ‘Vision Picking’ solution in more warehouses around the globe, establishing a new standard in order picking for the industry. 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’ hands of paper instructions and allowing them to work more e©ciently and comfortably. The international trials have shown an average improvement of productivity by 15% and higher accuracy rates. The user-friendly and intuitive solution has also halved onboarding and training times.
Big data helps us in predicting the right time to deliver parcels & goods at a place to actually deliver last mile satisfaction to our consumers. We are using data more and more to improve the e©ciency of our operations. We use chatbots for enhanced customer service, which is on time, quick, automated and faster. Such small yet signi.cant innovations make a massive impact in customer satisfaction.
How is the DHL Group working on reducing carbon emissions?
Sustainability has long since become one of the most important issues of our time. Our new climate protection target is to reduce all logistics-related emissions to ZERO by the year 2050. To help realize this vision of zero emission logistics, we have established a number of ambitious interim goals across the main action areas of our sustainability strategy.
By the year 2025, we want to:
> Increase our carbon efficiency by 50% compared to 2007 levels. This new target is based on the approach taken by the Science Based Targets Initiative.
> Reduce local air pollution emissions by operating 70% of our own first and last mile services with clean pick-up and delivery solutions, such as bicycles and electric vehicles.
> Have more than 50% of our sales incorporate Green Solutions. In this way, we also make our customers’ supply chains greener.
> Certify 80% of our employees as GoGreen specialists and get them involved in our environmental and climate protection activities. This includes joining partners to plant one million trees every year to protect our forests.
What will be the biggest trends in last mile over the next 5 years?
The last mile as the final touchpoint with the customer will only get more important. We will see the last mile becoming faster, more efficient, more automated with more options for the consumer. Companies have to constantly keep challenging themselves in order to disrupt tomorrow’s futurist solutions before anyone else does that. Believe it or not, we have just heard an innovative architectural .rm pitching the idea of building a ‘drone-ready’ condo tower in Japan or Dubai in the future. Drone Tower, which would look like a futuristic condo building, will have large balconies built to accommodate small electric aircraft or shipping drones. So yes, we are living in very exciting times and space and we have to make place for ourselves to deliver smile in the last mile.
What is your strategy and expansion plan?
We continue to focus on becoming a leader in e-commerce logistics. We would continue investing on our people, processes and products. We are planning to penetrate into the tier II & III markets. We are also investing on our road transportation such as DHL SmarTrucking. We are also looking out for avenues to support e-tailing giants such as Amazon and Flipkart to enhance delivery mechanism because collaboration will be the mainstay for companies to prosper. Additionally as part of our Zero Emission drive, we have started testing the scope of electric vehicles in India but the problem of accessing adequate charging stations remains to be the key concern. Once the government starts taking cognizance of the matter and push the fossil fuel operated vehicles o¬ the road, we will be better placed to take the green steps.
PATH BREAKING INNOVATIONS
Drones for delivery
Revolutionizing the delivery of medicines to remote areas using drones – the pilot project Deliver Future proves that it's not science .ction. Three experts in their respective fields are making it happen: DHL, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the German drone manufacturer Wingcopter. Over a six-month period, they successfully tested the delivery of medicines using a drone to an island in Lake Victoria. During the trials, the autonomous DHL Parcelcopter 4.0 completed the 60 km flight from the mainland to the island in 40 minutes on an average. A total of 2,200 km was flown and roughly 2,000 flight minutes recorded during the pilot project.
A key feature is that the DHL Parcelcopter 4.0 does not need any infrastructure as it takes o¬ and lands vertically. After delivering its cargo, it can easily be loaded with blood and laboratory samples to take back to the mainland. In future, the Parcelcopter could therefore not only improve logistics in the public health sector: it has the potential to help prevent crises worldwide, for example allowing an early response to slow the spread of viral diseases like Ebola.
StreetScooter Work XL
Ford has begun production of the StreetScooter WORK XL electric van at its European headquarters in Cologne, Germany. StreetScooter has been a subsidiary of Deutsche Post DHL Group since 2014. WORK XL is the largest delivery van in the StreetScooter portfolio, with a load volume of 20 m3, room for more than 200 packages, and a payload of up to 1,275 kg. Ford will manufacture the van with a range of electric motors and lithium-ion batteries. Compared with diesel models, each electric delivery van will o¬er a reduction in CO2 emissions of 5 tons each year and a saving of 1,900 ltrs of fuel. Deutsche Post DHL Group is using the WORK XL to support its urban parcel delivery service in Germany.