Express Canada Leading the way in logistics

No one knows logistics like DHL. In speaking with Mathieu Floreani, Chief Executive Officer of DHL Express Canada, the company leader detailed international operations, particularly in Asia, South Africa and the Middle East, where business is booming. Subsequently, this has provided plenty of opportunities for its Canadian operations, many of which had been relying on foreign business as opposed to only Canadian or American economies. Floreani emphasized that

Canadian operations were wounded quite badly by the recession and many domestic industries have yet to fully recover, still in “post-crisis mode”.

Nevertheless, DHL now moves more than 150,000 packages per day, strictly in its Canadian operations.

New to Canada himself three years ago, Floreani said, “When I was new to Toronto, I was in a cab and I chatted with the driver. I asked him where he was from and he told me he was from India originally. He asked me what I do and I said I am the CEO of DHL. He said, ‘Oh DHL. What a marvelous company. DHL was in my village in India before the telephone was in my village!’ And it is true because in India we have a footprint that is second-to-none.”

With that, companies are now beginning to acquire domestic companies in India. Floreani noted his own surprise about large corporations no longer being the only ones with a worldwide footprint, but also small and medium enterprises as well. Many small Canadian companies are sourcing from areas of China, Bangladesh and South America, for example, setting a trend of more carefully managing inventory, developed to a new level of express requirements, meaning a tighter schedule for both imports and exports for many Canadian companies. That is not to forget the strengthening of the Canadian dollar, something that has allowed many companies to develop a value-added segment, importing products at a cheaper rate alongside a more efficient currency.

“I am not an economist. I am just giving you the trends that we see in our business,” Floreani added.

Floreani noted the internal need for improved customer efficiency and its respective handling, comparing it to a factory operation that always offers the highest of quality and training, specifically due to the massive number of customer transactions handled on a daily basis.

“We are a really big customer centric company—it’s in our DNA. Companies on Wall Street and companies in the TSX approach us wanting to improve their sourcing. Companies ask how we can re-engineer their supply chain because they feel it is not completely efficient,” Floreani said. “Our network for international express is really a competitive edge. Across any industry in the world, we claim to be the most international company, meaning we have the most countries where we operate ourselves, not like distributing with a company that is taking care of a location.”

Recession navigation

DHL saw the recession as an opportunity to supply better value to its client during a critical time.

“Recessions might always look a bit far stretched or bullshit, but it’s the truth,” Floreani said. “But the recession is also opportunities too. To convince you that [the recession] is not bullshit, we had our best year worldwide in many years in 2009, taking advantage of the recession to attack some of our challenges.”

Accordingly, DHL introduced new motions where its delivery zones were expanded and, even more impressively, its delivery promptness improved. More flights are in place to improve transit in order to maintain DHL’s worldwide leadership. The other side of that equation, facing a one or two per cent downturn, is that there was still a sense of an adjustment for the company, adjusting its course and thinking a little bit differently, a little more creatively. In yielding positive results, DHL remapped some of its processes, refining its approach to achieve better results not only financially, but also with improved on-time service for a complete re-engineering of its operations.

“I’m not saying I want a recession like this to hit every year, or every five years, but we navigated through that difficult time,” Floreani said.

Corporate awareness

Corporately, DHL structures itself upon three major social programs, known as Go Help, Go Teach and Go Green. Go Help is built around disaster response teams that are located in each of its operational continents, ready to jump in at any crisis.

“More and more in the global world, you have people sending food or blankets to countries. The freight to be carried has gone up exponentially,” Floreani said. “Ten years ago, we realized that the critical part was airport operation, managing the airport and the warehouse in case of disaster.”

In Go Green, DHL takes an aggressive stance to top Kyoto [Protocol] requirements, with a desire to reduce its emissions by more than 30 per cent by 2012. The company has emerged as being more efficient and less of a pollutant with the usage of hybrid vehicles and fleets. Go Teach programs fund schools and teaching programs in developing countries.

Separating from the competition

Worldwide, DHL is a part of Deutsche Post, the first global logistical operator, meaning that the company is considered a leader in three business operations—international express, storage and logistics and in-air freight and sea freight. DHL offers this distinctive solutions package to its larger customers in a bundling of three core competencies, making for a unique operation.

“You do not want to come across as a big efficient machine without any heart. We want our customers to have that touch and feel, to enjoy working with and contacting us, so that is how we look at operational efficiency,” Floreani said.

Strategic vision for international affairs

In respect to its Canadian operations, DHL relies on its historic presence in the Canadian marketplace, now involved in it for more than 100 years, its footprint everywhere in its strong domestic business network. With that, the company’s vision is to offer its worldwide network more so to Canadian companies simply because it has such a market share of international trade. As the largest international express company worldwide, DHL’s vision, quite simply, is to continue being international specialists.

“We already had the best transit times between continents. We have implemented new flights from Asia to Europe, and Europe to United States and Canada to improve transit time,” Floreani said. “We increased capacities to Asia and North America, so we want to be able to cope with the continued increase of trade to and from Asia. We want to continue pushing that international knowledge and specialization.”

Developing the international specialists industry in 1969, Floreani estimated that DHL was the first to create an international network, about 10 to 15 years prior to its two main competitors. Floreani added, “When you have invented an industry, 20 years before anyone else showed up, you have relationships, you know the countries, the geography, and the customers.”

In the past three months, and coming eight months, DHL will train each of its 100,000 Canadian employees on the company’s international express business, with a goal of ultimately reinforcing its international knowledge. Floreani summarized, “The more you do it yourself, the more control you have on your service and the more control you have on satisfying your customers, so that is really critical to us.”