DHL Express sees strong start to year, Brexit challenges under control

DHL Express is off to a strong start to the year even as capacity remains tight due to the COVID-19 pandemic, with post-Brexit adjustments on track, Global CEO John Pearson told the Reuters Next conference on Wednesday.

The global logistics company, which reported a blowout fourth quarter, is in “good shape” to manage vaccine distribution and what Pearson forecast will be a sustained boom in e-commerce.

“We’ve had a strong start to the year,” said the 35-year company veteran. “Things are normal and moving.”

The end of 2020 posed a three-fold challenge for logistics providers, as surging online demand at Christmas coincided with COVID-19 vaccine distribution and a Brexit deal that threw up new customs arrangements and paperwork.

DHL Express, part of Germany’s Deutsche Post, has so far supplied 10 European countries with COVID-19 vaccine, as well as Israel, Bahrain, Chile, Costa Rica, Mexico, Oman and Singapore.

Handling the vaccine from Pfizer and Germany’s BioNTech, which must be deep frozen while in transit, is “right in our wheelhouse”, said Pearson, highlighting DHL Express’ experience in medical transport.

“The packaging and the dry ice protects the vaccines at that temperature for up to 10 days,” he explained.

“Given that our standard transit time is between one and five days, pretty much anywhere in the world, there’s even a five-day buffer before any spoilage would take place.”

BREXIT EDUCATION
Fourth quarter e-commerce volumes at DHL Express expanded by over 40%, more than double the growth rate in the preceding three months, the company said on Tuesday.

Services between Britain and the EU were suspended for several days ahead of the Dec. 24 Brexit agreement but transit times are returning to normal, Pearson said.

“There’s a lot of customer education to do, which is our responsibility,” Pearson said. “I would expect regular shippers to be back to where they were and understanding the paperwork in a matter of days.”

Still, aircraft capacity, tight since planes were grounded at the beginning of the pandemic, remains a challenge, the Briton said. DHL Express has just ordered another eight Boeing 777 wide-bodied jets to expand its fleet.

Pearson said he saw e-commerce demand continuing to grow, even if the pandemic fades and life returns to normal – reinforcing the bullish outlook given on Tuesday by Deutsche Post for more profit growth this year and next.

Seasonal peaks in online shopping demand are increasingly spreading through the year, he observed. “If you see peaks all year it becomes a plateau,” said Pearson, who first joined DHL Express in 1986.

“We see e-commerce as an enduring trend,” added Pearson. “Traditional trade fairs may not exist in the future.”