Primer on a New Player in the Game: DHL
We recently posted about the coming parcel “triopoly,” as DHL returns to the US prepared to compete with shipping giants FedEx® and UPS®. If you haven’t heard of DHL or you’re simply unfamiliar with what they’ve been up to overseas, here is a quick primer to bring you up to speed on this carrier as they become part of the US Parcel ecosystem.
In 2008, after five years of trial and (mostly) error competing against UPS and FedEx in the US, DHL pulled out of the US express market. In 2011, DHL rebooted a portion of their services in the United States after losing an estimated $9.6 billion.
But even after such a significant loss in the US, DHL was working internationally towards the future of small parcel logistics with new innovations. In 2014, DHL launched their first “parcelcopter” delivery service1. This service delivered small parcel to the German island of Juist, enabling DHL to reach a new demand and delivery method that companies like Google are still troubleshooting. Soon after, DHL planned and launched their s$10 million Asia Pacific Innovation Center (APIC)2 in Singapore, their first center outside of Germany. APIC exhibits innovations that will transform logistics operations. It was launched with the support of the Economic Development Board (EDB).
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“With DHL as a strategic partner in this journey, Singapore is well positioned to serve the needs and harness the opportunities presented by the dynamic supply chain landscape and emerging technology and trends globally.” Mr. Lee Eng Keat, Director, Logistics and Natural Resources at EDB, said.
Shortly after the launch of APIC, DHL began testing deliveries to the trunks of cars3 through a mobile app, deliveries to personal lockers4 on a 24-hour basis, and the use of autonomous carts5that assist with loading and unloading inventory at shipping warehouses.
After continuous advancement in the logistics industry overseas, DHL now plans to expand their operations in the United States. DHL also plans to expand their portfolio of services; they are soon to begin selling zero emission delivery vehicles6, which will span 70 miles of delivery range and reduce maintenance and running costs by 50% and repair costs by 80%. This may potentially affect the end cost of shipments for the future.
DHL is making a footprint in the industry, and is determined to stay ahead of the curve with new innovations, somewhat similar to what Amazon did for the retail industry. Although these innovations have only reached test markets, US shippers should understand that the presence of a third shipper could potentially impact their business soon—not only because of DHL’s innovations, but because of the innovations UPS and FedEx will likely begin introducing in order to compete with DHL.