dhl digital transformation case study

How Digitalisation Has Transformed DHL Express’ Operations

Embarking on digital transformation projects has driven greater efficiencies and higher productivity for dhl express. ceo ken lee and cio jimmy yeoh from dhl express asia pacific share more..

Red warning lights pop up simultaneously on the dashboard of the Advanced Quality Control Center (AQCC) system at DHL Express’ operations centers across the network, but the atmosphere at each facility remains calm.

The data analytics prowess of the Artificial Intelligence-powered AQCC system — designed to monitor shipment movements and flag issues in real time — is in full control.

Locations of the shipments stalled in transit, also known as exceptions, are quickly identified and its projected routes mapped. The team’s analysts then hunker down to implement corrective actions to ensure these shipments can still arrive at their destinations on time.

The seemingly effortless task was once a laborious responsibility for logistics providers like DHL Express, but digitalization is slowly turning things around.

Logistics has long been known as a traditional industry associated with manual labor and repetitive tasks. Often held back by legacy processes and dated IT systems, logistics companies are increasingly aware of the need to harness technology to stay competitive in a fast-moving industry.

Deutsche Post DHL Group (DPDHL Group) — in line with its Strategy 2025 goal of delivering excellence in a digital world — is investing over €2 billion on digital transformation projects from 2021 to 2025 to improve the experience of customers and employees, while also increasing operational excellence.

In its 3,200 facilities across more than 220 countries and territories worldwide, DHL Express relies on best-in-class technology solutions to deliver close to 500​ million shipments a year (according to 2020 figures).

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“By constantly listening to our customers’ needs, we have implemented technological innovations that are relevant and sensible for our customers, employees and operations,” said Ken Lee, CEO, DHL Express Asia Pacific.

“We’ve introduced solutions to streamline vital processes, automate time-consuming repetitive tasks, and helped our teams become more productive. These include autonomous guided vehicles to enhance our operations, chatbots to complement customer service operations, and shipment sensors with track-and-trace capabilities,” he shared.

The Covid-19 pandemic has further proven how essential the company’s digital transformation efforts and investments are to addressing the surge in cross-border e-commerce demand and driving greater efficiency and productivity.

“Before the pandemic, we were cognizant that digital transformation was an imperative to maintain and elevate our service levels as a logistics provider. The pandemic accelerated our plans to allow our work force to collaborate and work virtually from any location. We also fast-tracked our adoption and rollout of technologies, such as live chat and digital assistants, which were crucial in helping us cope with an unprecedented demand surge worldwide,” explained Jimmy Yeoh, Chief Information Officer, DHL Express Asia Pacific.

To better understand the impact of digitalization on DHL Express, here's a closer look at the notable digital transformation projects undertaken in recent years:

This article was originally published on DHL’s  Logistics of Things  and was republished with permission.

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How DHL Express Navigated the Pause — and Rebound — of Global Trade

• John Pearson
• Steven A. Altman

Three counterintuitive lessons in resilience.

The stunning turnaround of international trade during the Covid-19 pandemic and the logistics operations behind it suggest three key lessons in resilience that run counter to conventional thinking. First, beware of binary thinking, especially about globalization. Just as expectations about new technologies erasing the effects of borders and distance have repeatedly been overblown, globalization’s setbacks are also frequently exaggerated. Second, your people are the differentiator when a shock renders plans obsolete. Companies should treat investments in workforce skills and culture as key pillars of corporate resilience. And finally, size and direct control of assets can make a company nimbler. Despite the typical narrative that scale and asset-intensity are associated with inertia, size and reach were clear advantages for DHL and other global enterprises during the pandemic.

When the pandemic spread around the world in early 2020, trade in goods shrunk at the fastest pace on record , only to reverse course mid-year and surpass its pre-pandemic level before year-end. The logistics industry was in the eye of the storm as the pandemic snarled supply chains , and lessons from its successes during this period can help executives re-think how to make their own businesses more resilient.

• John Pearson is the CEO of DHL Express and a member of the board of management of Deutsche Post DHL Group.
• Steven A. Altman is a senior research scholar, adjunct assistant professor, and director of the DHL Initiative on Globalization at the NYU Stern Center for the Future of Management .

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Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

DHL Supply Chain’s Digital Transformation in the Warehouse

Robotics | By Clint Reiser • 08/17/2022

In 2018, DHL Supply Chain announced its plans to deploy emerging technologies in 350 of its North American facilities. My colleagues and I often have the opportunity to discuss initiatives such as this with company executives. Of course, we subsequently share interesting insights in Logistics Viewpoints articles.  Earlier this month, Brian Gaunt, Senior Director of Accelerated Digitization at DHL, provided me with an update on the company’s warehouse digitization journey.

DHL Innovation Funnel

DHL Supply Chain has instituted a well-defined process for vetting and adopting warehouse technologies. They conduct research, engage with partners (100+), and identify the opportunities that best align with their objectives. The most promising technologies enter the productization phase. Productization is the term DHL uses to describe technologies that have defined applications for use within DHL, that are supported by deployment guides along with established profile matches that identify “best fits” for the technology’s use within the organization. As an analogy, DHL has established parameters that enable these technologies to be used like “a tool in a toolbox.” DHL has defined twelve technologies with clear benefits to the company and its customers. These are categorical technologies such as “assisted picking robots” or “robotic arms” rather than the technologies of specific technology providers. There are currently more than 1500 go-lives of technologies that passed through the productization phase into commercialization and industrialization. Brian provided me with insights into some specific warehouse automation and robotics examples.

Autonomous Mobile Robots and AGVs

The use of AMRs in high-volume collaborative warehouse settings has received most of the media attention over the last five years. However, large load AGVs also provide the potential for significant productivity improvements if they are properly applied. DHL appears to have identified and captured one of those opportunities. DHL and Campbell Soup Company have deployed a fleet of Crown Equipment Reach Trucks supported by JBT’s autonomous technology.  The high reach AGVs are used to access heavy loads stored high in double deep racking. In contrast to the operations that use Locus bots, this operation has lower volumes of heavier loads that require greater precision and care. Much of the benefit obtained from these AGVs in from inventory accuracy achieved through accurate inventory location ID and precise alignment for pallet load movements.

Robotic Arms – Trailer Unloading

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The digital revolution of freight forwarding: Not a matter of if, but when

A visit to smaller haulage or freight forwarding companies may feel almost like a step back in time, with fax machines still in use and every transaction recorded by hand on paper.

The slow embrace of new digital technologies by the freight forwarding industry has inevitably become something of a cliché.

Meanwhile, the acceleration of technological progress continues across social, cultural and business interactions today, from the emergence of self-learning Artificial Intelligence (AI) to self-driving cars.

In some ways, the impression of the industry is unfair. For example, it airbrushed from history how rapid adoption of the container facilitated globalization, how the industry used Enterprise Resource Planning (ERP) systems to transform data and logistics from the 1990s and, more recently, how the agility and flexibility of supply chain service providers enabled global e-commerce.

Yet, the cliché is also founded in reality.

A case in point is the take-up rate of electronic air waybills (e-AWB) which has been glacial at best. Even after years of incentives and despite being ordained the default contract of carriage for all air cargo shipments, e-AWB penetration only stood at a paltry 67.5 percent last December.

Disruption underway

Traditionally slow to capitalize on new technologies, freight forwarders are feeling the pressure to keep pace with the rapid digitalization and automation.

With industry competition intensifying, the race to establish market-leading positions built on the latest technologies and innovations is now well and truly on, with key players going head to head to deliver the optimal customer experience.

This wave of ‘disruption’ — spearheaded by software-focused freight start-ups like Flexport, which is now valuated at US$3.2 billion (€2.9 billion) — has caused disquiet and prompted much debate in the supply chain.

A staggering array of e-business companies have come to the fore, promoting a range of new digital services designed to take costs and inconveniences out of shipper supply chains. Some market themselves as cloud-based e-forwarders and brokers or online sales platforms, while others manage freight rates and data, and sell information.

In road freight, the battle to ‘Uberize’ trucking has been ignited by the emergence of digital freight marketplaces like Saloodo!, a subsidiary of Deutsche Post DHL Group (DPDHL), which enables shippers to search for road freight carriers, and carriers to find cargo shipment requests, at the click of a button.

E-commerce giants such as Amazon, JD.com, Lazada and Alibaba previously used online platforms to reinvent retail models. Now they are building their own digital platforms and logistics footprint to support the growth of e-commerce volumes.

Container shipping lines — armed with new digital sales platforms, start-up incubating hubs and freight forwarding arms — are also joining the digital fray and rebranding themselves as integrated supply service providers.

Shipping giant Maersk, for instance, launched an online portal to digitize its booking processes and also offer the option to facilitate customs clearance digitally .

At the moment, there is no segment of the transport and logistics business that is immune to the technological innovations hitting the market. Most claim that they can help meet the needs of the on-demand economy and cross-border e-commerce more efficiently than systems which rely on copious amounts of paperwork and manual transactions.

Ready for digitalization

The ‘disruptor’ narrative often paints a picture of slow-adapting incumbents being swamped by unencumbered, tech-savvy arrivistes.

However, forwarders and third-party logistics providers (3PLs) would argue that that this perception is inaccurate.

A 2018 IT survey by consulting firm KPMG revealed that while transport and logistics companies lagged behind in its digital capabilities, they were highly effective in using digital tools to enhance the overall customer experience.

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In line with DPDHL Group’s push for digitalization as part of its Strategy 2025 , DHL Global Forwarding has raised the stakes with the launch of its latest digital solution: myDHLi, the first digital freight platform in the industry that covers all modes of freight.

The one-stop mobile portal provides customers with real-time shipment visibility round the clock, with a convenient follow-and-share option to encourage collaboration with colleagues, customers and partners.

While most digital platforms only offer quoting and booking functions for single modes of freight, myDHLi tailors quotes and bookings, and offers competitive freight rates across all modes — a first in the forwarding market. Customers can easily access all other information including shipment analytics and all essential shipment documents within the portal.

By combining these services on a single platform, customers will have 360-degree visibility and the ability to manage their logistics anytime and anywhere, according to Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific.

To address the environmental impact of shipments, myDHLi even calculates CO2 impact and offers the means to reduce or offset emissions by, for example, selecting alternative fuel options.

Regardless of newer technologies that enter the digital fray, freight forwarders ultimately still serve the core purpose of delivering shipments from end-to-end.

The rise in digitalization simply sets the stage for delivering an exceptional customer experience by making the process more transparent, user-friendly, and cost-effective.

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DHL Express puts Digital Transformation at the heart of its operations

DHL Express UAE, a global player in the logistics industry that specialises in international shipping, courier services and transportation has embarked on a Digital Transformation journey all in an effort to deliver efficient services to its broad and varied customer base. Praveen Sashi, Senior Director of IT and Logistics, DHL Express UAE, tells Intelligent CIO Middle East, how the company is insing technology to drive change, innovate and transform the logistics sector in the region. Manda Banda recently chatted with Sashi and brings this report.

Talk us through DHL Express Middle East IT setup and why it has been critical to implement digitalisation and innovation across your operations Middle East.

In the region and globally, we have a world class IT infrastructure and services that power up our physical network which includes planes, facilities, vehicles and most importantly people and connecting them all. It is our IT platform that helps us deliver a great customer experience at every touchpoint. In fact, our IT platform mirrors our physical network 24 by 7 and works in over 220 countries, that’s practically everywhere on the planet.

As an innovation leader in our industry, we have successfully implemented numerous digitalisation programmes across all business functions over the past years, despite this we believe Digital Transformation presents even more opportunities and has enormous potential for our industry. In our 2025 company strategy, digitalisation is a key lever to optimise our core business, enhancing both customer and employee experience while also creating new growth opportunities.

What were the main challenges that DHL Express faced prior undertaking these digitalisation initiatives and what IT technologies did you work with?

Over the past years a major area of focus has been around modernising our IT backbone across all business functions and countries that we operate in and migrating from legacy applications towards a state-of-the-art global application portfolio. We had numerous digitalisation solutions implemented over the past years, our next phase of digitalisation is about accelerating adoption of new age technologies across the business to achieve better speed, efficiency and flexibility that’s needed to keep pace with today’s demands.

Having looked around for suitable IT solutions currently in the market, how did you settle for the technology and vendors you selected?

We have a few important checks that go into the evaluation of any new technology. For example, one of the criteria is that any new technology or solution must integrate seamlessly with our IT ecosystem and should be scalable to support our breadth of international operations. We also have a strong governance model and process that greenlights new technologies for implementation. We work with many technology vendors and their expertise, flexibility and ability to deliver is key for a successful partnership when it comes to new technology adoption for a specific use case.

Given that DHL Express is one of the largest logistics and transportation conglomerates in the Middle East and globally, how important is it for the company to have robust and secure IT infrastructure and systems?

A secure, highly reliable and available IT platform is central to our company strategy that consists of four basic pillars which starts with motivated people – so, having the right tools and automation helps our employees stay connected while enabling them to do a great job (be productive and happy). Our IT platform mirrors our physical network that ensures critical information is available when needed at all levels within the organisation and that helps deliver a great service quality which links to the second pillar. Adding new IT capabilities reduces customer effort and keeps them loyal. Finally, a highly efficient and resilient IT platform contributes to a profitable network which is contributing to the fourth pillar.

The role of a CIO/ IT Director/IT head etc. is constantly evolving with more C-level and business line executives getting involved in making IT and technology purchasing decisions. How hard is it for you to get the correct support and buy-in from your peers at DHL Express?

Personally, I think it comes down to a few basics and due diligence. First, it’s important to ensure that adoption of any technology is aligned to a business priority. Secondly, there must be a proper feasibility study, for example, how will the proposed investment deliver returns or benefits. As an example, beginning of 2020 we launched a Blockchain enabled ecommerce platform with Dubai Customs meant to simplify the import and export clearance process for our customers. This was a major investment and first of its kind like a start-up. In fact, the solution has already simplified cross-border movements of goods for our customers that has in turn enabled them to expand and grow their business.

How is DHL Express guiding its customers on its journey of providing smart, innovative and dynamic services as the company has embarked on its Digital Transformation journey?

As a company we are focused on making our customers’ life easy as well as making DHL easy to do business with. With this in mind we are constantly engaging with our customers at all levels. Last year, we had launched a new highly intuitive online customer solution for which we had organised an event just so our customers could come and experience the new technology first hand, ask questions and give feedback which we later incorporated into the solution. During the pandemic our customer facing team has done hundreds of online trainings and webinars to guide and support our customers on our digital journey.

The Middle East has witnessed a heightened wave of cyberattacks in recent months targeting various industry verticals especially with the COVID-19 pandemic and most employees working remotely. How is DHL Express protecting its digital assets from cyber criminals?

We have a saying in our company that information security is everyone’s responsibility. Awareness and education is the first step in tackling this important topic and we are constantly reinforcing key messages on prevention and protection, both with our employees and customers. At an infrastructure level, we have a rather elaborate set of security standards and measures implemented at every level to secure our business, as you would expect from an organisation of our size and scale of operations. Again this is an area that will further benefit from our digitalisation agenda, for example we have already seen practical applications of AI and Blockchain in enhancing security.

What IT projects have you implemented in the last 12 to 18 months and how have those projects impacted DHL Express’ business in the Middle East region.

Firstly, over the years we have evolved our standard processes in most areas of our business that is adequately supported by an enhanced global application portfolio which are centrally hosted and managed. This has made us agile, it’s faster to deploy new IT capabilities and changes across the organisation or scale up fairly quickly in response to business and customer requirements or related challenges such as the ones posed by the recent pandemic. For example, overnight activation of contactless delivery, digital payment options and paperless processes to minimise physical contact. Having said that, we are also well structured in terms of IT organisation, while we have a global team managing centralised IT services, we have country IT engaged and focused on the local business and its customers. This approach has ensured a resilient IT foundation, while it also enabled us to quickly respond to massive shifts in employee work and customer behaviour patterns and drive innovation on the frontline that was required to adapt to the new normal. Thus, we were also able to successfully shift our focus from just reacting to the crisis to getting ahead of it.

What percentage of DHL Express’ business is now digital or online?

Almost all our customer facing services are available online or accessible through a digital channel. Our electronic shipment percentage is nearly 100% which means there’s no manual entry of shipment data at any stage, this reduces effort for our internal teams and helps them deliver better service to our customers.

What do you see as the biggest challenge that DHL Express faces on its Digital Transformation journey and how has working with technology vendors on the digitalisation of the logistics sector helped to bring a spotlight on this vertical?

Digitalisation in the logistics sector is happening so fast and on so many fronts, it can be difficult to keep pace. With digitalisation the goal post keeps shifting with new technologies and breakthroughs. Further, the integration of digital solutions using AI, Blockchain, RPA with real world application of robotics, IoT wearables can be quite transformational for our industry. So it’s important to stay focused, use the right vendors, prioritise and take a measured approach while also being prepared for the unknown.

What has been the main changes in terms of your overall product and services offerings to your customers ever since you started this digital journey in the Middle East?

We have already made great progress in integrating digitalisation into our core products and services over the past years and this has served us well during the pandemic, for example our customer facing solutions and simplified interfaces made it easier for customers to do business with us across all channels, data analytics helped improve operational visibility and optimise deliveries, process automation reduced customer efforts while helping our employees become more productive and happier.

What is the total workforce for DHL Express in the Middle East and how many branches does the company have across the Middle East?

DHL Express has been present in the region for more than 40 years and this gives us the capability and knowledge to respond to our customers’ needs. We offer our customers the expertise of more than 5,200 certified international specialists, 240 branches and more than 200 facilities across the region. Additionally, our robust network of more than 220 countries and territories in the world has helped many businesses grow their global footprint in the world and tap into new markets.

What initiatives are you focusing on for the rest of 2021 and beyond what does the future hold for DHL Express in the logistics given the challenging times we are experiencing at the moment?

Although we have made significant progress, I believe there are still many untapped opportunities to unlock yet with further digitalisation in particular leveraging new age technologies such as AI/Machine Learning, Blockchain, IoT, robotics etc. to augment and support our people in providing great service to our customers. With our new strategy 2025, digitalisation is experiencing a major push forward, it’s about delivering excellence in a digital world.

How do you see DHL Express evolving in the next 24 months and what will be the driving force of that change?

As the pace of change accelerates, I believe the need for further optimisation of business processes and improving employee and customer experience by establishing new digital capabilities will amplify. In many ways, the current crisis has also been a learning in terms of investing in the right technologies and prioritising and this will help businesses adapt as well as proactively address radically different market conditions. As a result, the IT mandate will stretch beyond the familiar realm of just keeping the lights on or being a business partner to that of being a change agent to drive Digital Transformation and innovation.

Yes, I am really proud of our people in every function and country, everyone is tirelessly at work, finding solutions and going above and beyond to deliver goods for our customers and keep the supply chain functioning smoothly despite the challenges the pandemic has thrust upon us. Their ‘can-do’ spirit and ‘as-one’ culture has worked wonders in delivering on our company purpose of connecting people and improving lives.

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Delivering Digital Innovation at DHL

With shipment volumes at an all time high, dhl is embracing ai and automation to maximize performance.

Like so many other organizations we’ve covered, DHL’s digital transformation didn’t start with COVID-19. However, the pandemic did dramatically change its course. 

DHL’s current digital transformation began in 2019 with the release of its “ Strategy 2025 ”, a 5-year plan that outlined how the company planned to modernize its IT systems, integrate new technologies and upskill its workforce for the digital age. 

When the pandemic hit the following year, not only did DHL have to transition a significant percentage of its 500,000+ employees to a remote work environment, it also had to accommodate an unprecedented volume of shipments. While DHL could've chosen to put its plan on hold, it did just the opposite and went full steam ahead. 

As Jimmy Yeoh, Chief Information Officer, DHL Express Asia Pacific explained in a blog post on the DHL website , “Before the pandemic, we were cognizant that digital transformation was an imperative to maintain and elevate our service levels as a logistics provider. The pandemic accelerated our plans to allow our work force to collaborate and work virtually from any location. We also fast-tracked our adoption and rollout of technologies, such as live chat and digital assistants, which were crucial in helping us cope with an unprecedented demand surge worldwide.”

The challenge is momentous: how do you complete more shipments faster than ever before but with less people? DHL has found its answer in artificial intelligence and AI. 

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With 3,200 facilities across more than 220 countries and territories worldwide, DHL Express handles over 1.3 billion shipments per year . Until the past few years, tracking and ensuring all of these shipments arrived at their destination on time required near-herculean effort. If something went wrong, it could take multiple days and teams to uncover what had gone wrong.

To help eliminate this problem for good, DHL built its Advanced Quality Control Center (AQCC) system, an AI-powered system that tracks shipments and flags issues in real time. Not only does this system enable DHL’s logistics experts to tackle problems as they arise, it also provides them with increased visibility into why the shipment is delayed and how the issue can best be resolved. 

Robotics and Automation

Given that demand only seems to be increasing, it's clear to DHL that humans alone can’t handle the volume of shipments that travel through its facilities. With this in mind, DHL is in the process of deploying thousands of autonomous robots into its warehouses and shipping facilities. 

For example, in July 2021, DHL deployed its new robotic arm flyer sorter . Built by Dorabot, the robot uses AI to sort over 1,000 small parcels per hour, representing a 41% increase in efficiency. 

In November of 2021, DHL Supply Chain announced the implementation of 15 autonomous forklifts in its warehouse operations at Tyrefort in the West Midlands. Capable of working up to 11.5 meters high, these robot forklifts are now responsible for “double-deep pallet putaway and retrieval tasks.”

Last but not least, DHL recently announced they would be purchasing a fleet of Boston Dynamics’ Stretch robots over the next three years. Fast and highly maneuverable, the Stretch  uses computer vision technology to autonomously seek out and grab boxes without the need for special programming. 

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DHL - The Logistics Company Of The World

Table of contents.

DHL is a leader in the logistics industry, providing top-quality delivery services worldwide.

DHL’s journey started in 1969 as a small air courier service flying between California and Hawaii. 

Today, DHL is a logistics powerhouse with an international network spread over cities in every major region of the world.

DHL’s way of doing things is centered around the two Rs – Respect and Results. 

The company has created a work environment where employees are respected, valued, and motivated to deliver results. 

This is the secret to DHL's ability to remain the number one choice of customers for over 50 years, even as other logistics companies have come and gone.

DHL Is A Dominant Player In The Logistics Industry

• Revenue of  EUR 81.7 billion
• Generated a profit of  EUR 7.9 billion
• Current share price of  41.22 EUR
• Employs  400,000  people
• Operates in  220  countries
• Delivers  1,614,000,000  parcels annually

Let’s review DHL’s awe-inspiring journey right from its humble beginnings in 1969 to today.

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Three Young Innovators Take On the World of Logistics

One fine day in San Francisco, three men had a novel idea that would revolutionize the global economy.

They became the pioneers of the international air express service - an emerging industry in the 70s. It proved to be the beginning of an incredible journey as what started as an air courier service went on to become the leading provider of logistics solutions.

How DHL Came To Be?

The year was 1969, and three young shipping executives were grappling with the same problem. 

In those days, cargo ships docking at foreign ports would have to undergo a long and cumbersome document verification process. It caused a lot of delays and increased costs for shipping companies making it quite expensive to transport goods from one country to the next.

So, the three shipping executives, Adrian Dalsey, Larry Hillblom, and Robert Lynn, decided that they needed a novel solution to this problem. Together, they came up with the idea of flying shipping documents to port authorities so that they could be verified and processed in advance before the ship even arrived at the port.

The three men knew that their solution could increase the turnaround speed for ships at port, so they decided to launch their own air-courier service called DHL to deliver important documents across the globe.

The name DHL was chosen because it is an acronym based on the first initial of each of their surnames.

The fledgling delivery service was off to a promising start. Its very first customer was the Bank of America which needed a secure courier service to carry its letters of credit and other documents. So, DHL started flying along the California-Hawaii route and soon expanded its service to other areas to accommodate its customers better.

DHL Goes International

DHL quickly realized that the international market offered immense opportunities that were as of yet unexplored. 

So the company began to branch out into the international market and was the first to start flying to destinations in the Far East. 

At the same time, other competitors were busy improving their position in the U.S. So, DHL was far ahead of its competition in consolidating its international base.

With this aim in mind, the founders of DHL recruited Po Chung in 1972 to establish the company’s global network. Subsequently, Chung set up DHL International Ltd in Brussels as a sister company of DHL Airways. 

The new company grew rapidly and handled a greater volume of courier services, almost five times larger than the courier traffic handled by its domestic counterpart.

DHL International had added multiple destinations in Japan, Hong Kong, Singapore, and Australia in just two years. In 1976 it also expanded into Europe and the Middle East. 

Growth was rapid throughout the 70s, and DHL continued to expand into other regions across the globe, entering the Latin American market in 1977. It also established a significant presence in Africa as the 70s wound to a close.

Until this time, the company had solely focused on transporting documents, but with an ever-growing global network, DHL decided that the time was ripe to diversify its services. So in 1979, the company started delivering small packages to various destinations around the world. These packages would generally weigh around 70 pounds and could be easily transported by air.

Back To The Home Front

The 80s brought increased competition to the delivery service industry as rival FedEx aimed to chip away at DHL’s dominance in the international market. 

However, DHL continued to expand despite the growing competition, and this period was also marked by increased growth for the company.

DHL needed to think creatively and find new outlets for its air courier service to deal with the stiff competition. The company soon discovered a need for express delivery service in the hospitality sector. In 1980, DHL signed an agreement with Hilton International Corporation to provide daily document delivery service from 49 Hilton Hotels. 

Guests staying at these hotels could use the DHL service to send important documents anywhere in the world. DHL couriers would personally oversee that the documents made it through customs and then deliver them to their final destination abroad.

By 1981, the company handled 10 million shipments and flew to over 250 cities. Sales too were at an all-time high that year, peaking at just over $100 million ($318 million today after adjusting for inflation). 

The success fueled DHL's growth, and the company was the first to sign agreements with countries in the Communist bloc. In 1983, it expanded its European network to the Eastern bloc nations of Hungary and East Germany, which were part of the Communist bloc at the time.

While DHL was the service of choice internationally, things back home looked quite different. Although 97 % of the largest U.S. firms used DHL to transport their documents overseas, rivals FedEx and United Parcels Service (UPS) continued to dominate the U.S. market.

To increase its share in the domestic market, DHL launched two major hubs at airports in Cincinnati and Salt Lake City. It also established nine smaller hubs in various cities across the U.S. Furthermore, DHL upgraded its sorting equipment to speed up delivery by reducing shipment processing time. 

DHL Airways started an overnight point-to-point service between 126 American cities as soon as the hubs were ready to handle shipments.

The company also bought an airplane fleet that consisted of three Boeing 727s and seven Learjets to handle domestic shipments. Soon helicopters were added to the growing fleet to transport documents during rush hour in New York, Houston, and Los Angeles.

Overall, in 1983 the company recorded sales worth $600 million ($1.7 billion today after adjusting for inflation) from its international and domestic businesses combined. It was a whopping increase in sales of $500 million in just two years from 1981 to 1983. 

The majority of the shipments included bank documents and shipping documents. According to one estimate, the company was responsible for around 80% of all bank documents traveling by air from Europe to the U.S. However, many of the shipments also consisted of computer tapes and spare parts.

By 1984, DHL delivered to almost 125 countries, and its 500 stations dotted all over the world were handling 15 million international and domestic shipments annually.

But new challenges were looming on the horizon, and in 1985 rivals FedEx and UPS officially entered the international express delivery market.

Key Takeaway 1: Geographical Diversification Unlocks New Opportunities

The early years of DHL's history are characterized by large-scale international expansion. 

The company was quick to understand that there was a need for an air courier service that delivered shipments to different countries. In the international arena, this gap in the market had not been addressed by anyone until DHL decided to set up its international office in Brussels. Within five years, the company was flying to destinations in the Far East, Europe, Middle East, Latin America, and Africa.

DHL's initial geographical diversification strategy became the stepping stone to bigger opportunities. Since the company had a courier network spread across multiple countries, it was able to sign a mutually beneficial agreement with Hilton International Co. to transport documents from Hilton hotels.

Hilton got to offer its guests a world-class delivery service, and DHL got a new outlet for its service.

DHL’s Twenty-Five Years of Impeccable Service

This is the story of DHL’s twenty-five years of unmatched service in the logistics industry before its acquisition by Deutsche Post in the early 2000s.

The company continued to be a pioneer in multiple ways, often being the first to commence operations in new destinations. It also showed a remarkable aptitude for forming symbiotic relationships with other companies that helped it expand its operations at an unprecedented rate.

DHL Outpacing the Competition

As FedEx and UPS upped the ante in the international market, DHL started looking for innovative ways to improve its customer service. 

The company teamed up with Western Union to deliver documents produced on Western Union's EasyLink electronic mail with this goal in mind. It helped save time for customers as they did not have to travel to hand-deliver documents.

DHL was also the very first express delivery service to start operations in China, well before any other company had even reached out to the Chinese Government. In 1986, DHL International signed a joint venture agreement with the People's Republic of China to launch DHL Sinotrans.

To increase DHL’s presence in Eastern Europe, the company also signed a joint venture agreement with a firm in Hungary named DHL Budapest LTD. By 1988, DHL was responsible for 98% of all shipments and packages traveling between the West and Eastern Europe.

The company also showed stellar progress on the domestic front, and sales in the U.S. alone amounted to $375 million in 1988 ($916 million today after adjusting for inflation). By this time, DHL was among the top 400 largest private firms in the U.S., with over 5000 employees. In fact, revenues from its domestic and international network combined were recorded at approximately $1.4 billion in 1988.

DHL Maintaining Market Share

Although DHL Airways had expanded its network in the U.S., by 1989, the company only controlled about 5% of the domestic market. 

Hence, the company launched an aggressive advertising campaign to increase its name recognition in the U.S. DHL decided that it needed a humorous ad concept, so it roped in renowned cartoonist Gary Larson and gave him creative license over the upcoming campaign. Larson did not disappoint, and the following year DHL launched an ad campaign showing DHL vans zooming past the competition flying their high-end planes.

DHL also took a novel approach to air delivery. Although the company had its own cargo fleet, it also entered into agreements with passenger airlines to carry its shipments. In contrast, other air courier services relied exclusively on their own planes to transport documents.

However, DHL’s strategy of using passenger planes freed up capital for investment in technology. The company spent around $220 million in 1991($467 million today after adjusting for inflation) to upgrade its technology and its ground-handling equipment.

At this point, DHL needed an influx of fresh capital to take the business to the next level. In 1990, DHL International sold 5% of its business to Japan Airlines and 5% to German-based Lufthansa airlines. It sold another 2.5% to a Japanese trading firm called Nissho Iwai. These three companies were also given a combined stake of 2.5% in U.S-based DHL Airways. Each firm also had the option to buy more shares in the future. The decision to sell these shares helped DHL gain access to investments worth $500 million and take advantage of the resources of large airlines.

Competition from rivals grew quite intense during this time, so DHL decided to diversify its services by entering the freight services industry. So far, DHL had only transported documents and small packages, but now the company was ready to transport heavy cargo.

It was a step in the right direction, and DHL's total revenue jumped from $1.5 billion to $2.3 billion in 1991. It made DHL the 59th largest company in the U.S., with more than 21,000 employees handling around 80 million shipments annually.

In 1992, all three of DHL's shareholders decided to increase their share in DHL International. Japan Airlines and Lufthansa both decided to increase their stake to 25%, while Nissho Iwai increased its share to 7.5%.

As a result, DHL expanded its European network and started operations in Albania, Latvia, Estonia, and Greenland.

DHL Launches Capital Spending Program

DHL marked its 25th anniversary in 1994. At this point, the company controlled 52% of the Asian express shipment market. In contrast, competitors FedEx and UPS each controlled about 24% of the market.

By 1993, total revenues had hit the $3 billion mark, which allowed the company to set aside $1.25 billion for a capital spending program. The program was spread over four years, and the company used this time to upgrade its communications and automation systems.

As part of this initiative, in 1995, DHL invested $700 million ($1.3 billion today after adjusting for inflation) in expanding its Pacific Rim network. The company upgraded its facilities in Hong Kong and Australia and started operations in 16 new cities in China, India, and Vietnam.

Furthermore, $60 million ($114 million today after adjusting for inflation)was spent on creating a brand new logistics hub in the Philippines at the Ninoy Aquino International Airport in Manila. There were also plans to create more facilities in Bangkok, Tokyo, Auckland, and Sydney.

1995 was also when DHL launched its first website so that customers could connect with the company using the internet. In fact, the company recorded a 23% growth in revenue, with total sales clocking in at $3.8 billion.

The company also saw a massive increase in its Middle East shipments. As a result, DHL established a 42,000-square feet super hub at the Dubai International Airport in 1996. The new hub would coordinate with DHL’s existing facilities in Bahrain to handle shipments in the entire Middle East region.

In 1996, the company announced plans for another super hub worth $100 million ($184 million today after adjusting for inflation) to handle its growing shipments in the U.S. The new hub was located in the Midwest and would work closely with the Cincinnati hub to handle all domestic shipments.

As the 1990s came to a close, DHL was still expanding at a remarkable pace, with 37 new destinations added to the former Soviet Union. The company also set up a hub at Ferihegy Airport in Budapest to handle the increased load of shipments in Eastern Europe and the former Soviet Union.

In 1998, DHL announced plans to sell a 25% share of its business to German-based Deutsche Post. It was a strategic alliance between Europe’s largest postal service and the world’s leading air courier service. The partnership helped DHL secure investment funds and allowed the company to gain a significant foothold in the German market.

In the years to come, the new alliance would prove to be the start of a new journey.

Key Takeaway 2: Symbiotic Partnerships Help Maintain Market Share

This period of DHL's journey illustrates its ability to forge mutually beneficial partnerships that helped the company expand its operations to 227 countries with over 2000 stations in major cities across the globe.

DHL pursued a policy of attracting investment from the world’s largest airlines and postal companies to gain access to fresh capital and resources. The company then used the additional investment to upgrade its technological capabilities and provide better service to millions of customers. 

It also expanded its network to service more countries in Europe and the Asia-Pacific region. In fact, this strategy worked so well that DHL controlled around 60% of the international market in 1999 despite stiff competition from other service providers.

Dawn Of A New Era

The partnership between DHL and Deutsche Post was destined for bigger things. Initially, Deutsche Post only had a 25% stake in DHL, but it increased its stake in DHL in 2000 to 50%. 

As it increased its share in DHL, the company made plans to re-brand DHL's image to make it the leading provider of logistics solutions worldwide.

Deutsche Post acquires DHL

In 2002, Deutsche Post negotiated with Lufthansa Airlines to acquire its 25% share in DHL.

With the acquisition of Lufthansa’s share, Deutsche Post now had a majority stake of 75% in DHL. A few months later, Deutsche Post acquired the remaining shares from Japan Airlines, and DHL officially became a wholly-owned subsidiary of Deutsche Post.

In 2003, The Deutsche Group initiated a re-branding campaign to introduce DHL in a new design and format. The new brand image of DHL was in line with the Group’s ‘one-stop shopping’ concept. The aim was to create a single company that provided a whole range of diverse services. 

Hence, the Group combined its courier and express business (DHL) and its parcel delivery service (Euro Express) with its logistics arm Danzai under a single entity. With the addition of Euro Express and Danzai, the new DHL was all set to become the leading provider of logistics support and express delivery in the world.

The Group then turned its attention towards making DHL the number one choice of customers everywhere by launching its First Choice' campaign in 2006. 

The goal was to conduct training sessions for employees to equip them with the skills to ensure maximum customer satisfaction.

The Group launched a total of 1000 individual projects worldwide under its First Choice campaign to make sure that individual customers and corporate clients could get the best service and logistical support possible.

The following year, the Group launched the DHL Innovation Center in Germany. The new research and development center carried out joint projects with business partners IBM, Intel, and SAP. 

The center also carried out research work with international logistics institutes based in MIT in the U.S. and the German Fraunhofer institutes. The principal goal of the research partnerships was to develop innovative and marketable products that could keep up with changing trends in the world of logistics.

The newly-developed products and technologies would be displayed in a separate showroom to give visitors, customers, and business partners a closer look at the future of logistics.

How Did DHL Expands Its International Network?

In 2008, DHL opened a new air freight hub at Leipzig/Halle Airport in Germany.

The company chose the airport location for its proximity to growth markets in Eastern Europe. It also gained authorization for operating night-time flights, thereby reducing delivery times. Furthermore, the new hub seamlessly integrated air, road, and rail carriers to create a smooth delivery process which helped DHL improve its customer service and expand its network in Europe.

The Leipzig hub was also the first DHL facility to meet its energy needs self-sufficiently. It was the first facility that powered itself using 1000 square meters of solar energy cells. The hub also had two underground artificial reservoirs with a capacity to store 3000 cubic meters of rainwater annually. DHL used the stored rainwater to wash DHL aircraft instead of relying on precious drinking water.

The new sustainable initiatives signaled a shift in the Group’s philosophy. The Deutsche Post Group launched a climate change protection program in line with growing concerns regarding climate change. The GoGreen program aimed to reduce the Group’s carbon footprint by 30% for every document and package that DHL transported. The company knew that the only way to achieve this target would be to build energy-efficient facilities and warehouses and optimize the use of its air and ground fleets to cut down on wasteful fuel practices.

In 2009, the Group renamed itself Deutsche Post DHL to better represent its revamped internal structure. The overhauled company structure would enable open leadership and a simplified planning process. The Group also laid out a comprehensive strategy for the years 2010-2015 that included paying more attention than ever before to evolving customer needs.

In 2012, DHL once again undertook an international expansion campaign by opening a brand new facility at the Shanghai Pudong International Airport in China. 

The new facility was named the DHL Express North Asia Hub, and it was the largest logistics facility in Asia at the time. The company bought eight new airplanes to meet extra demand on the routes between Shanghai and North Asia, Europe, and the U.S.

The launch of this new hub in Shanghai helped DHL bolster its market position in Asia, and the company planned to generate at least a third of its total revenue from Asia alone by 2017.

The following year, DHL expanded its existing hub in Cincinnati at the Northern Kentucky (CVG) Airport. It was a much-needed upgrade that equipped the Cincinnati hub to meet the growing demand by multinational corporations and SMEs for shipping and logistical support.

Key Takeaway 3: Re-brand To Meet Changing Consumer Needs

Over the years, DHL has continued to reimagine itself as a logistics service in line with evolving consumer needs and expectations. 

Starting with the ‘one-stop shopping’ concept in 2003 and the 'First Choice campaign' in 2006, DHL has aimed to become the go-to choice for customers by providing integrated air, road, and rail delivery services through a single platform.

DHL also recognized the need to project itself as an innovative problem-solver in a rapidly changing world shaped by technological advances and increased global interconnectivity. 

In line with that goal, The DHL Innovation Center uses cutting-edge technology to design innovative and marketable products that can keep up with changing trends in the logistics industry.

DHL Preparing For The Future Through Digital Transformation!

In 2015, DHL re-branded itself with the new tagline ‘The Power of Global Trade’ to highlight the connection between trade and personal well-being. 

As the leading provider of logistical support, DHL is well placed to help businesses flourish especially small-scale startups and local enterprises. 

A bustling entrepreneurial landscape can empower the lives of small business owners and revitalize whole communities.

DHL Teams Up With Smart Today

In 2016, DHL hit upon a new outlet for its services when it teamed up with Smart today. 

Customers who drove smart cars could now use their cars as postal addresses for parcel delivery. DHL tested out the new service in multiple phases to ensure parcels delivered to the smart cars are transported in a secure manner.

Furthermore, DHL developed the Global Trade Barometer in 2018 to gauge the current state of global trade and predict future developments. This initiative was launched in line with DHL's new tagline in 2015 to highlight the role played by logistics in boosting global trade. The indicator itself is based on a wealth of logistics data generated by DHL's annual operations, and it is evaluated using sophisticated A.I. technology. The state of global trade is also a good indicator of the world's economy, so analyzing global trade helps the company predict future trends in the global economy.

In 2020, the Deutsche Post DHL Group partnered with the German Federal Ministry for Economic Cooperation and Development to launch the GoTrade program to help SMEs from developing countries gain better access to global markets. 

The Ministry and the Deutsche Post DHL Group will spend a total of 30 million euros to digitize the customs and trade processes. They will also promote e-commerce and low-emission logistics in multiple African cities.

The final goal is to empower small business owners in African cities by helping them harness the benefits of globalization.

Key Initiatives in DHL’s Digital Transformation Journey

Over the years DHL has taken a number of steps to transform digitally including:

• AI powered Advanced Quality Control Center (AQCC) system that quickly located shipments stalled in transit, ensuring corrective actions can be taken right away
• DHLBot, an automated flyer sorting bot that enhances sorting efficiency while minimizng human interaction
• Autonomous Guided Vehicles that sense the environment and ferry shipments safely
• Autonomous Mobile Robots to provide on-demand deliveries
• Chatbots to offer 24/7 support and delight customers
• On-demand Delivery Online Portal to give customers the flexibility to schedule and track deliveries
• QR code to reduce physical contact and manage parcel returns
• Routo optimization to ensure faster deliveries while minimizing costs
• Cutting-edge sensors to track-and-trace shipments effectively

All of these have enabled DHL to maximize performance, modernize its systems, and achieve desirable business outcomes.

DHL's "Strategy 2025" Paving The Way For Future Success

The DHL of today is a forward-looking company that deeply understands the changing trends in the logistics industry. 

As a result, the company chalked out its future plan of action in its ‘Strategy 2025’ that is based on four critical trends that will shape the logistics sector in the coming years. 

These trends include:

Globalization

Digitalization, sustainability.

Since 2015, the company has been committed to the promotion of global trade. DHL recognizes that it can harness increasing globalization to create new opportunities and outlets for its services. 

DHL’s GoTrade initiative, a core part of its future strategy, is aligned with the latest trends in globalization and e-commerce. The program aims to connect all kinds of enterprises, from large-scale multinationals to small home businesses. 

DHL's e-commerce program provides solutions geared toward the unique needs of different businesses, from a small business in need of a reliable parcel delivery service to an MNC that wants to streamline its shipping operations.

As part of the Strategy2025, DHL aims to spend over €2 billion on digital transformation projects by 2025 to increase operational excellence and delight customers at all end-points.

The company expects the digitalization drive to yield tangible benefits such as a yearly run rate benefit of at least EUR 1.5 billion by FY2025. DHL also expects a 33% increase in its forecasting ability with the new technological upgrades. It will allow the company to better predict daily volumes on international routes for its air courier service.

Moreover, DHL continues with its long-standing mission to become the first choice of customers everywhere by increasing brand loyalty. DHL will do this by using digital technologies to improve customer experience. 

As part of Strategy 2025, it also aims to become the employer of choice by giving its employees the skills and incentives to deliver quality-driven results that meet customer requirements. The company also wants to maintain its reputation as the investment of choice by delivering attractive returns for its shareholders.

DHL has outlined plans to achieve its zero emissions target by 2050. This will entail a complete de-carbonation of the company. It will also include moving towards carbon-efficient delivery solutions. 

Hence, the Deutsche Post DHL Group is going to invest over 7 billion euros over the next ten years to reduce its CO2 emissions. The funds will be used to switch to less-polluting fuels and to expand the existing zero-emissions e-vehicle fleet.

Key Takeaway 4: Keep Your Finger On the Pulse of Shifting Trends

Right from its inception, DHL has always been acutely aware of changing trends and has clearly demonstrated the ability to adapt its strategy to reflect these changes. 

This flexible approach has paid off for the company by improving output efficiency and quality of service. The digitalization drive is but one example of the company's ability to modernize its operations. It has improved the company's ability to manage shipment traffic along its many air routes. It has also allowed the company to create better products and services, resulting in higher customer satisfaction.

Growth By Numbers and Key Strategic Takeaways

DHL started as an air courier service that only transported documents. 

Over the years, the company has diversified its services, first with the addition of package shipment and later on with freight services. 

Today, the company is a global leader in the logistics industry with an unmatched portfolio of services ranging from international shipments and parcel delivery as well as road, air, and sea transport services to e-commerce solutions. Its diverse range of services is provided under six main divisions: DHL Express, DHL Global Forwarding, DHL Freight, DHL Supply Chain, and DHL eCommerce Solutions.

All of the success DHL has had boils down to its laser-sharp vision, mission, and strategy.

DHL’s Vision

Be a post office for Germany and the shipping company of the world.

It highlights DHL’s focus on being the first choice of people worldwide to get their shipments delivered, seek a job, or invest.

DHL’s Mission

Contribute to the success of all stakeholders, simplify the lives of customers, and make the world a better place - that’s what DHL aims to do.

DHL’s Growth Evident From Numbers

Key strategic takeaways from dhl’s journey.

Securing Mutually-Beneficial Partnerships To Fuel Growth

DHL has always looked out for strategic partnerships that have allowed the company to grow even during periods of intense competition from rivals. This strategy gave DHL a competitive edge in two ways. Firstly, it gave the company access to new platforms and customers. Customers were delighted as they got access to exclusive services such as direct parcel shipments from their hotel rooms to any destination in the world. Secondly, DHL's partnerships with major airlines gave it access to capital and investment funds. DHL injected these funds into spending programs that helped upgrade the company’s technological capabilities.

Creative Re-branding

DHL has also pursued a policy of re-branding as the company grows and sets new goals for the future. The re-branding has always been aligned with what customers expect of a global brand. Customers today expect brands to provide multiple services through the same platform, so DHL combined express delivery, freight services, and parcel shipments to create a one-stop shopping solution.

Connecting People, Improving Lives

DHL continues to innovate and produce better solutions and products for millions of customers worldwide. It fully understands the power of seamless logistical support in connecting millions of businesses to their global markets and customers in far-flung corners of the globe. The company has a dedicated R&D program that develops new tools and products based on changing trends within the international market. For instance, innovative tools like a low-emissions logistical support package are then used through DHL’s GoTrade initiative to empower small businesses in developing countries. Empowered business owners became local change leaders in small communities, improving people's lives in the Global South.

Be A Leader For Positive Change

DHL continues to be the change that it wants to see in the world. The company has an extensive sustainability program to pursue its corporate responsibility goals. The programs are oriented towards community service and education. DHL also has a comprehensive GoGreen program to make the company's operations as carbon-neutral as possible. As the climate crisis worsens, DHL has taken it upon itself to invest on a massive scale in greener fuel and carbon-efficient transport solutions that will allow the company to switch from the traditional way of doing business. The company has always maintained that it is not just a profit-making machine but a business that is concerned for the wider community and the planet.

Revolutionizing, shaping, and simplifying logistics , DHL has become a force to be recokned with not only in the logistics industry but in the world. Odds are that if anything is transported or delivered from one place to another, DHL might be involved in the process - such is the size and stature of the company. While it began as an air courier service to transport documents, today DHL delivers it all - prosperity, health, joy, and development, connecting people and businesses worldwide. 

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DHL Express uncovers next wave of E-commerce growth

By 2025, 80% of all B2B sales interactions between suppliers and professional buyers will take place in digital channels.

• Whitepaper predicts online B2B increase of more than 70% by 2027 to US$ 20.9 trillion (2019: US$ 12.2 trillion)
• Covid-19 pandemic drives digital transformation and significantly accelerates B2C and B2B E-commerce growth
• DHL Express closed FY2020 with best result in its history (EBIT: €2.7bn, +34.9% yoy)

Bonn - Today, DHL Express released a new Whitepaper "The Ultimate B2B E-commerce Guide: Tradition is out. Digital is in". The study predicts strong growth for the B2B E-commerce market in the coming years:  by 2025, 80% of all B2B sales interactions between suppliers and professional buyers will take place in digital channels. The impact of the Covid-19 pandemic on the pace of digitalisation and the purchasing behaviour of technology-savvy millennials, who are now of an age to be the professional B2B decision-makers, are the main drivers of this global E-commerce growth. What is predicted for the future of the B2B sector, has already been visible in the significant B2C E-commerce rise over the last years, where DHL Express experienced high growth rates particularly during the holiday peak seasons (e.g. Easter, Christmas) and mega shopping days (e.g. Black Friday, Cyber Monday). In total the B2C E-commerce volumes within the DHL Express network increased in 2020 by approximately 40%, compared to 2019.

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This positive business development is also reflected in the FY2020 financial results of the company: With a total revenue of €19.1 billion (+11.9% year-on-year) and EBIT of €2.7 billion (+34.9%) the Express division of Deutsche Post DHL Group closed 2020 with the best result in its more than 50 years history. With its worldwide network and breadth of industries served, DHL Express was able to accommodate fast-changing trade flows. Furthermore its presence in more than 220 countries and territories helped consumers and businesses to stay connected by enabling them to trade around the world - also during the Covid-19 pandemic.

 "Even in times of worldwide shutdowns, globalization has shown its resilience, fuelled by digitalization and the power of global trade", says John Pearson, CEO of DHL Express. "These trends have led to an ever growing number of consumers to shift their shopping activities online. The pandemic has accelerated this development like never before, with a sharp rise in businesses selling their goods in the global marketplace. E-commerce and global logistics thus provided the key to unlock local shutdowns, keep economies running and mitigate the impact of Covid-19 for many of our customers."

Acceleration of E-commerce growth through Covid-19 

It was not only B2C E-commerce that was growing due to ongoing digitalisation and changed shopping behaviour of consumers. In 2019, before the pandemic, global sales on B2B E-commerce sites and marketplaces had already increased by 18.2% to reach USD 12.2 trillion 1 , outpacing the market size of the B2C sector. Through Covid-19 and the resulting acceleration of digitalisation, this global B2B E-commerce volume is estimated to reach USD 20.9 trillion by 2027 2 .

"We have been facing the pandemic for over one year now", says Michiel Greeven, Executive Vice President Global Sales at DHL Express. "A year that showed how nearly a decade of digital evolution happened in just a few months' time, with online shopping and cross-border shipping as the new normal. And this is true not only for B2C retailers, but also in terms of B2B E-commerce as companies started recognising that online selling platforms are crucial for their business success, today and in the future. As a result, there will also be an additional need for global Express shipping and DHL Express is well positioned to support all B2B companies on their journey." 

Huge potential in B2B E-commerce also driven by Millennials

The Whitepaper, compiled by DHL Express, uncovers factors driving the growth of the global B2B E-commerce market: besides general trends such as globalisation and digitalisation, a new technology-oriented generation of millennials is starting to make its mark. Already, millennials account for 73% of all professional B2B purchasing decisions. As digital natives, their experiences in the B2C-sector translate to high expectations when making B2B transactions, pushing companies to invest in digital solutions, such as selling platforms, while offering great growth potential.

"If B2B businesses want to make the most out of the new cross-border and E-commerce opportunities they need to start adapting to the changing buying behaviours. Especially with the upcoming generation of millennial as B2B decision-makers, who are further driving the digitalisation of the sector. B2B customer experiences have to be more aligned with the digital B2C experiences. As international E-commerce specialists, we have the know-how and insights to support businesses to adapt to the ongoing changes and unleash their full potential" says Leendert van Delft, Vice President Global Sales Programs and Global E-commerce.

DHL Express is investing to continue to meet high customer demands

In 2020 DHL Express delivered 484 million shipments in total for its customers (B2C and B2B) around the globe, around 9% more per day than in 2019. To adapt to this significant growth of its network, DHL Express continues to invest annually more than €1 billion in new state-of-the-art facilities around the world to multiply its sorting capacity (+65% since 2013), hires new employees (+10,000 year-on-year) and adds new freighter aircraft to its fleet (+20 units year-on-year). In this context, DHL Express recently announced the purchase of eight more Boeing B777 wide body freighters and a partnership with Smartlynx Malta to add two Airbus A321 to its fleet. With these measures, DHL Express ensures that its worldwide customers can benefit from the global  E-commerce boom.

1 Statista   2 Researchandmarkets

Press contact

Corporate Press Office

Journalists can contact the Corporate Press Office at DHL Group's headquarters here.

DHL Group Charles-de-Gaulle-Str. 20 53113 Bonn Germany

X (twitter):  @DHLglobal

DHL Group – Digital Transformation Strategies

All the vital news, analysis, and commentary curated by our industry experts.

Published: September 12, 2023 Report Code: GDDT0723ES-ST

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Table of Contents

Dhl group digital transformation strategies report overview.

DHL Group (DHL) is strengthening its focus on the use of innovative technologies to enhance its operational efficiency. Cloud, AI, blockchain, robotics, and big data are among the technologies the company is focusing on. The annual ICT spending of DHL is estimated at $2.5 billion for 2023. A major share of this spending is earmarked for software, hardware, and network and communications. DHL is a global logistics company operating under two brands, namely DHL and Deutsche Post. While DHL provides e-commerce logistics solutions as well as a wide range of freight transport, parcel and international express services, and supply chain management services, Deutsche Post offers postal and parcel services in Europe. DHL Group is organized into five operating divisions namely DHL Express, Post & Parcel Germany, DHL eCommerce, DHL Supply Chain, and DHL Global Forwarding and Freight. Global Forwarding and Freight accounted for the largest share of DHL Group’s revenue in 2022. DHL Group serves several industry sectors, including auto-mobility, chemicals, consumer, energy, engineering and manufacturing, life sciences and healthcare, public sector, retail, and technology.

The DHL Group Digital Transformation Strategies report will act as a reference point to understand a company/competitor’s digital strategy. It will also help in understanding the digital preparedness of the company against its peers. The information included in this report is sourced from a mix of our very own internal database and authentic secondary research links such as the company’s annual report, presentations, press releases, etc. The report covers an overview of the company, its digital transformation strategies, technology focus areas, technology partnerships, investments, partnerships, technology introductions, and ICT spending.

Digital Transformation Strategies

DHL successfully piloted an IoT-driven system to monitor operational activities at its Beringe warehouse facility in Germany. Developed in collaboration with Conduce and Cisco, the system allowed DHL to visualize operations within the warehouse through heatmaps and other reports and visualizations.

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DHL Technology Theme Focus

DHL is strengthening its focus on the use of innovative technologies to enhance its operational efficiency. Cloud, AI, big data, robotics, and blockchain are among the technologies the company is focusing on.

DHL Technology Focus

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DHL Technology Initiatives

DHL has been involved in several strategic technology partnerships, collaborations, investments, acquisitions, and rollouts over the past few years. For instance, in 2023, DHL Express Taiwan partnered with EMILY.RPA for a series of digitalization projects. Under the partnership, DHL Express Taiwan began using EMILY.RPA’s process automation robots automate tracking of the delivery status and location of each package.

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DHL ICT Spend by Function

• Communications
• Applications
• End-user computing
• ICT Service desk

DHL ICT Spend by Function, 2023 (%)

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DHL ICT Spend by Channel

• Internal development and maintenance
• Technology vendors (direct)
• Local resellers
• ICT services providers/consulting firms
• Specialist outsourcers
• Systems integrators

DHL ICT Spendy Channel, 2023 (%)

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DHL External ICT Spend by Segment

• Software (including Cloud SaaS)
• Hardware (including Cloud IaaS)
• ICT services
• Network and communications

DHL External ICT Spend by Segment, 2023 (%)

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This report provides:

• Insight into DHL’s technology activities.
• Overview of technology initiatives covering partnerships, technology introductions, investments and acquisitions.
• Insights on each technology initiative including technology theme, objective, and benefits.
• Details of estimated ICT budgets.

Reasons to Buy

• Gain insights into DHL’s technology operations.
• Gain insights into its technology strategies and innovation initiatives.
• Gain insights into its technology themes under focus.
• Gain insights into its various partnerships, technology introductions, investments and partnerships.

Overview                                                                                              

– Brief information about the company, its business divisions and its financials

Digital Transformation Strategy                                                      

– A summary of key  digital strategies/implementation efforts  of the company

Accelerators, Incubators, and Other Innovation Programs      

– D iscusses the company’s key strategic units, innovation labs, incubation and accelerator programs dedicated to technology innovation

Technology Focus                                                                               

– Lists the technology themes pertinent to the industry the company operates in and highlights the themes adopted by the company

Technology Initiatives                                                                       

– Discussion about all the technology introductions & partnerships the company has entered

Investment                                                                                            

– Brief discussion about the investments made by the company to acquire new technologies

Acquisitions                                                                                        

– Brief discussion about the acquisitions by the company

Partnership, Investment & Acquisition Network Map               

– A bird’s eye view of all the partnerships/investments/acquisitions that the company has made in the last 3-5 years

ICT Budget and Contracts                                                                 

– The company’s ICT budget segregated into hardware, software, and managed IT services

Key Executives                                                                                      

– Lists key executives and Digital Transformation Executives of the company, typically the key decision makers/influencers

Frequently asked questions

The annual ICT spending of DHL was estimated at $2.5 billion in 2023.

The key ICT spending categories by function for DHL are communications, data center, network, applications, end-user computing, ICT service desk, and management.

The key ICT spending categories by channel for DHL are internal development and maintenance, technology vendors (direct), local resellers, telcos, ICT services providers/consulting firms, specialist outsourcers, and systems integrators.

The key external ICT spending categories by segment for DHL are ICT services, software (including cloud SaaS), hardware (including cloud IaaS), network and communications, consulting, and others.

The key technological theme in focus for DHL are AI, big data, cloud, e-commerce, robotics, wearable tech, autonomous vehicles, connectivity, blockchain, electric vehicles, future of work and internet of things.

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