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Why going global?
Uwe R. Doerken – CEO DHL
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
2
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
3
Why going global?
Express business evolution
In the old days:
region = country
international
4
Why going global?
Express business evolution
Today:
region = continent
interncontinental
5
Why going global?
DHL markets are maturing
Market
Market Growth
Growth Percent
Percent
Latin and
Central
America
Market growth percent
Africa
Developing
Asian
markets
Share express vs.
total express and
deferred (including
deferred ground)
Conceptual market
maturity curve
Eastern Europe
10 new EU members for 2004 will
become mature markets much faster
than other Eastern European markets
Developed Asian markets
Western Europe
Due to the nature of competition and
market evolution, WE is likely to replicate
the shape of mature US market sooner
than any other Region
U.S.
Express share is increasing in high
growth rates
Maturity/
size
Market evolution
„ Air express used for timecritical documents
„ Day-certain parcel services
emerge/WPS increase
„ Fully integrated supply chains
emerge
„ No established supply chains
„ Multi-party supply chains
evolve
„ Air express fully integrated in
supply chain at service level/
price trade-off
„ No domestic markets (mostly
import/export)
„ Domestic markets develop
6
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
7
Areas with strong local presence
Domestic capability
Canada
Canada
Europe
Europe
US
US
Mexico
Mexico
8
Areas with strong local presence
Japan
Japan US$
US$ 125m
125m
•• 26
26 Service
Service centers
centers
Infrastructure investment in Asia Pacific …
South
South Korea
Korea US$
US$ 15m
15m
•• Bonded
Bonded warehouse
warehouse at
at
New
New International
International Airport
Airport
•• Service
Service centers
centers
China
China US$
US$ 9m
9m
•• 11
11 Gateways
Gateways
•• Pudong
Pudong Gateway
Gateway
•• Beijing
Beijing airport
airport
•• Service
Service centers
centers
US$
US$ 200m
200m
US$
US$ 58m
58m •• Will
be
invested
Will be invested into
into
•• 5%
5% stake
stake of
of DHL-Sinotrans
DHL-Sinotrans
Sinotrans
Sinotrans
infrastructure
infrastructure over
over the
the
next
5
years
next 5 years
Hong
Hong Kong
Kong US$
US$ 82m
82m
Taiwan
Taiwan US$
US$ 30m
30m
•• Express
Express Logistics
Logistics center
center
•• Service
Service centers
centers
US$
US$ 100m
100m
•• DHL’s
DHL’s Central
Central Asian
Asian Hub
Hub
•• Gateway
Gateway movement
movement
•• 44 Service
Service centers
centers
US$
US$ 400m
400m
•• joint
joint venture
venture with
with Cathay
Cathay
Pacific
Pacific and
and Air
Air Hong
Hong Kong
Kong
India
India US$
US$ 2m
2m
Malaysia
Malaysia US$
US$ 6m
6m
•• EHU
EHU facility
facility
•• Service
Service centers
centers
US$
US$ 52m
52m
•• Asia
Asia Pacific
Pacific Information
Information
Indonesia
Indonesia US$
US$ 2m
2m
•• Service
Service centers
centers
Singapore
Singapore US$
US$ 8m
8m
•• Southeast
Southeast Asia
Asia Hub
Hub
•• Service
Service centers
centers
Services
Services (APIS)
(APIS) Center
Center
… up to a total of US$ 1.1bn
9
Areas with strong local presence
Japan
Business Review
Sapporo
„ ? 300m in Revenue
„ 19% Margin at EBITA
„ 10.5 million shipment
Gunma
„ #2 market share after EMS (Japan Post)
Saitama
„ Re-branding completed
Matsumoto
Infrastructure
Okayama
Chiba
Osaka
Hiroshima
„ 2 Gateways
Tokyo
„ 1 Distribution Center
Fukuoka
„ 25 Spare Parts Centers
„ National Coverage
Ibaraki
Hokuriku
„ 46 Service Centers and
Express centers
„ 606 vehicles
Fukushima
Hamamatsu
Nagoya
Okinawa
Kobe
Yokohama
Kyoto
10
Areas with strong local presence
DHL Express in China
11
Areas with strong local presence
The relationship with Sinotrans has proven very successful...
„ Existing Joint Venture with Sinotrans highly successful with revenues of >€200m and
growth of >40% per annum.
A 5% stake of Sinotrans has been acquired for the price of € 50m.
„ 38% of the Sinotrans shares have been sold. 28% are in free float. 10% have been
given to strategic investors (DPWN, Excel, UPS, Nissan Forwarding).
„ DPWN objective:
- Stabilization and protection of existing Sinotrans relationship
- Improvement of DHL market position in China from cross-border to domestic service
provider.
12
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
13
World market for Express & Logistics
Global market size
Global
Global market
market revenue
revenue (USD
(USD B)
B)
Air
373
33
Ocean
Air
Road LTL
Road TL
Road
Ocean
20%
0%
Software
Global mail*
Total =
USD703B
Air
60%
40%
128
Dedicated
contract
carriage
80%
62
Express
Freight
Warehousing/supply
chain services
100%
107
Air Logistics
& Ocean FF
Mail
Note: Only 3rd
party trucks are
taken into
account; Railway
Freight market is
estimated at
USD114B
Mail
Source: Analyst
Reports; Experts
Interviews; Bain
Analysis
* Revenue Figures from 2000
14
World market for Express & Logistics
Express market size
Express market revenue (2002, USD B)
The
The global
global Express
Express market
market is
is estimated
estimated to
to be
be in
in excess
excess of
of USD
USD 100
100 Bn
Bn
100%
55.6
23.9
23.7
3.5
Total =
USD107B
80%
Road
60%
40%
20%
0%
Air
Americas
Europe
Region of origin
Asia-Pacific
RoW
Source: Boeing Air
Cargo Report,
DPWN Internal
Reports, Analyst
Reports, UPS
Company Reports,
FedEx Company
Reports, Bain
Analysis
15
World market for Express & Logistics
Express market share
20.5
20.8
Other
Other
Other
Sagawa
UPS
DHL
Yamato
0%
Intra-Americas
Intra-Europe
UPS FedEx
DHL
40%
Nittsu
UPS
TNT
FedEx
TNT
UPS
Other
TNT
FedEx
TNT
20%
Market
share
UPS
26%
FedEx
15%
DHL
12%
TNT
4%
DHL
DHL
60%
TNT
UPS
FedEx DHL
UPS
UPS
ABF
DHL
80%
Total =
USD107
FedEx
FedEx
Express market revenue (USD B)
100%
52.4
3.8 2.6
3.0 3.5
Other
Other
Leadership
Leadership varies
varies by
by sector
sector
MEA/ROW
Americas-Europe
Europe -Asia
Americas-Asia
Intra-Asia
RMS
1.8
0.6
0.4
0.2
Note: DHL includes Euro Express,
figures estimated
for 2002; Yamato,
Sagawa, and
Nittsu are domestic
Japanese only,
Express definition
includes deferred
ground packages
Sources: FedEx,
UPS, DHL, DPWN
STAR presentation
(Oct 2002), ACMG,
The Colography
Group, Bain
Regional Analysis
(US, LATAM, AP),
Bain Estimates
16
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
17
DHL Danzas Air & Ocean
Worldwide subsidiaries and a global network
„
„ 530
530 locations
locations
„
„ 13,000
13,000 employees
employees
„
„ 150
150 countries
countries covered,
covered,
(2002 figures)
„
„ corresponding
corresponding to
to 95%
95% of
of
worldwide
worldwide GDP
GDP
Own subsidiaries/JVs
Agents
18
DHL Danzas Air & Ocean
Net sales 2004 budget
Reflects the full effect of the acquisitions
45%
30%
5%
20%
Note: DDAir&Ocean regions differ in parts from the DHL Express regions. The regions are re-grouped to reflect the DHL Express structure.
19
DHL Danzas Air & Ocean
Leading market position
Air freight
%
Ocean freight
%
„ DHL Danzas Air & Ocean
6.2
„ Kühne & Nagel
6.3
„ Exel
5.2
„ DHL Danzas Air & Ocean
4.9
„ Nippon Express
4.8
„ Panalpina
4.1
„ Schenker
3.3
„ Schenker
3.4
„ BAX Global
3.2
„ Exel
1.2
„ Kühne & Nagel
3.0
„ Panalpina
2.9
Market: USD 22.7 billion (IATA)
Market: 16 million TEUs
Source: Company estimates based on various sources. Air freight refers to IATA sales (2002), Ocean freight based on TEUs (2002)
20
DHL Danzas Air & Ocean
Strategic alignment
DHL
DHL Danzas
Danzas Air
Air &
& Ocean
Ocean
Across
Across DHL
DHL and
and DPWN
DPWN
„
„ Customer-focussed
Customer-focussed sales
sales strategy
strategy
„
„ Implementation
Implementation of
of performance
performance
enhancement
enhancement projects
projects and
and realisation
realisation of
of
expected
expected savings
savings
„
„ Strict
Strict cost
cost management
management
„
„ Cooperation
Cooperation with
with DHL
DHL Express:
Express: e.g.
e.g. Sales
Sales
&
& Marketing,
Marketing, Air
Air Freight
Freight and
and operations
operations
„
„ Support
Support cross-divisional
cross-divisional projects
projects at
at
DPWN
DPWN level
level
„
„ Partnering
Partnering with
with Global
Global Customer
Customer
Solutions
Solutions (GCS)
(GCS)
„
„ Integration
Integration of
of back
back offices
offices into
into shared
shared
service
service centres
centres (e.g.
(e.g. finance,
finance, IT,
IT, HR)
HR)
Overriding Goal
To
To expand
expand the
the leading
leading market
market position
position in
in air
air and
and ocean
ocean freight
freight under
under
the
the new
new brand
brand
21
Overview
„ Why going global?
„ Areas with strong local presence
„ World market for Express & Logistics
„ DHL Danzas Air & Ocean
„ Global Customer Solutions
22
Global Customer Solutions
Designed to develop global customers across all DHL business units…
Express
Danzas Air & Ocean
Solutions
GCS
GCL
GCS approach
Focus on cross-selling
products and integrating
customer approaches and
processes across different
business units
GC
Coordination
GAC &
Corporate
Accounts
MNC
SOLS
customer
approach
Existing approaches
GCS
The key success factor for GCS is to operate an effective and efficient
customer development approach across multiple products/services
(from sales to implementation and program management)
GCL = Global Customer Logistics
GAC = Global Advantage Customers
[DPEE] Corporate Accounts
MNC = Multi National Customers
GC = Global Customers
SOLS = Solutions
23
Global Customer Solutions
…with a clear aspiration of adding value
GCS
GCS is
is about
about …
…
…
… while
while trying
trying to
to avoid…
avoid…
„
„ Emphasizing
Emphasizing aa customer
customer led
led approach
approach as
as
opposed
to
products
and
geographies
opposed to products and geographies
„
„ A
A business
business within
within the
the business
business –– leading
leading to
to an
an
“us”
and
“them”
syndrome
“us” and “them” syndrome
„
„ Being
Being aa global
global and
and strategic
strategic partner
partner for
for targeted
targeted
global
global customers
customers
„
„ Unjustified
Unjustified cost
cost build-up
build-up
„
„ Enhancing
Enhancing our
our ability
ability to
to meet
meet global
global customer
customer
needs
across
the
entire
supply
chain
needs across the entire supply chain
„
„ Expanding
Expanding the
the cross-BU
cross-BU and
and cross-regional
cross-regional
opportunity
opportunity pipeline
pipeline &
& improving
improving success
success rates
rates
„
„ Ensuring
Ensuring aa consistent
consistent approach
approach and
and priorities
priorities
for
global
customers,
leveraging
global
for global customers, leveraging global
expertise
expertise
„
„ Ensuring
Ensuring better
better overall
overall economics
economics for
for GCS
GCS
customers
customers
„
„ The
The creation
creation of
of parallel/competing
parallel/competing sales
sales
channels
channels
„
„ Increased
Increased complexity
complexity across
across the
the customer
customer
process
process
„
„ Jeopardizing
Jeopardizing existing
existing customer
customer relationships
relationships
„
„ Increased
Increased price
price pressure
pressure from
from customers
customers
„
„ Missing
Missing the
the link
link with
with and
and minimizing
minimizing the
the
motivation
motivation of
of the
the field
field
24
Global Customer Solutions
25
26