Excerpts from Deutsche Post AG's 2013 Group Annual Report.
Leading provider of international express services
In the EXPRESS division, we transport urgent documents and goods reliably and on time from door to door. Our network spans more than 220 countries and territories, in which some 100,000 employees provide services for more than 2.7 million customers. As a global network operator that applies standardised processes, we are constantly optimising our service to keep our customer commitments and respond specifically to customers’ wishes. All of this makes us the leading provider of international express services.
Our core business is time-definite shipments
International time-definite courier and express shipments are our core business. Our main product, Time Definite International (TDI), offers delivery as fast as possible. Customers in more than 180 countries can now purchase our premium Time Definite product with guaranteed pre-12 delivery and money-back guarantee. Our portfolio is complemented by industry-specific services such as Medical Express and Collect and Return, the latter of which is used in particular by customers in high-tech industries. Technical products are collected from the user, taken in for repairs and then returned. DHL has also increased activities for customers in the Life Sciences & Healthcare sector. We offer various types of thermal packaging for temperature-controlled, chilled and frozen content.
Our virtual airline
With an annual average of 3.1 million transported tonnes, DHL is one of the leading international air freight carriers. Our network consists of several airlines, some of which we own 100%.
This combination of our own and purchased capacities, which include varied terms of contract, allows us to respond flexibly to fluctuating demand. We do not enter into long-term capacity obligations until our demand for cargo space exceeds the existing offering. We use the available cargo space for our main product TDI as part of long-term contracts – Block Space Agreements – and we sell excess capacity on the air freight market. The largest buyer of this is the DHL Global Forwarding business unit.
We expanded services and capacities in the reporting year to meet rising trade volumes. Additional routes were opened between Asia and the United States as well as within Asia. As a result, we guarantee, amongst other things, next-day delivery for shipments sent from Japan to all destinations in the United States. In the reporting year, we completed the conversion of 18 Airbus A300-600 passenger planes into cargo planes, a project that began in 2011. The aircraft are now part of our regional fleets and are used mainly in Europe.
International express business has increased
The international express business benefited in the reporting year, amongst other things, from the overall stabilisation of the economy, the increase in e-commerce and the growing importance of small and medium-sized enterprises in international trade. The strong growth of our TDI product compared with the market indicates that we maintained our position as global market leader.
Positive development in the Europe region
Despite modest economic momentum the express business in the Europe region witnessed positive development. We were clearly the leading provider in 2011. In order to meet growing volumes in the future, we began work at the end of 2013 to double the capacity of our global hub in Leipzig, Germany. With improved service quality, we intend to strengthen our position at this strategically important location.
Geared for growth in the Americas
Given the economy’s solid performance, our express business in the region was also successful in the reporting year, as illustrated in the Group Management Report.
In the summer of 2013 we opened our expanded hub in Cincinnati, and, with a total investment of US $105 million, we are thus prepared for future growth, particularly in the small and medium-sized customer segment. We have also invested in Latin America, especially in Mexico and Brazil, the largest economies in the region.
Asia remains an important market
Asia remains an important and profitable market for us and it is expected that our leading position will have been further solidified there in the reporting year.
At our North Asia Hub in Shanghai, we are the first company in the region to be permitted to offer the sorting of international transit shipments, a service which we have provided since the fourth quarter of 2013. This not only expands our service but also improves the utilisation of the hub.
Reliable partner in the Middle East
Business in the Middle East remained particularly difficult in the reporting year, given the political unrest in Afghanistan, Yemen, Bahrain, Libya and Syria. Whilst adhering to legal requirements and ensuring the safety of our employees, we maintained our operations and therefore proved ourselves a reliable partner to our customers.
We are continuing to strengthen our presence in the Middle East through investments in Egypt, Saudi Arabia and Dubai, where we began construction of a logistics centre in the first quarter of 2013. The facility covering roughly 17,000 m² located near Dubai is intended to improve services for customers who import and export goods into and out of the United Arab Emirates. Together with our partner, MGE Middle East General Enterprise L.L.C., we shall invest around €20 million in the location and thus further expand our leading position in the area.