DHL Express USA CEO Sees Growth Recovery Ahead

So clearly consumers are spending, but the way they’re spending is definitely changing. We’re kind of down grading what we’re spending, maybe trading down a little bit. Your rivals, FedEx and UPS are seeing consumers and businesses making a shift to sending mail and packages by ground rather than by air. Are you seeing that too? I think what we’ve seen is we’ve we’ve come off of a time period where e-commerce and online buying has been very strong, strong U.S. dollar Americans are consuming. We see fast fashion, a lot of stuff coming in to get delivered maybe in the traditional segments like automotive, high tech, engineering and manufacturing. We haven’t quite seen that momentum in the orders translating into actual shipping in Q1. So I’m hopeful that Q2 and beyond we will see a bit of a recovery and some growth. In the meantime though, FedEx and UPS have cut costs by reducing their workforces. Are you doing anything like that? I think I’ve been, I think I’ll say I’m blessed that I haven’t had to do any major cutbacks in terms of staffing. I’ve been able to reduce things like overtime and some of the weekend work that’s allowed me to not have the the pains of having to do major layoffs. But we have seen volume come down and it is having an impact on our business as well. As that volume comes down, where’s it coming down to? Is that just kind of taking us back to kind of pre pandemic norms or are we kind of getting below, I think we’re still well above pre pandemic. If I look at from 2019, we’re well up from there. But certainly we all saw a big boom through the pandemic where you had personal protective equipment, vaccines and simply lack of capacity that moved all of our volumes up. We’re down from those heights, but still well above pre pandemic levels. Well, just as we were kind of hopefully putting the pandemic behind us and dealing with all of the supplies chain disruptions, we now have new issues. Of course, you have the situation in the Middle East, a lot of concerns about boats trying to get through Suez Canal, the Red Sea, and of course, you have the drought down in the Panama Canal. Has any of that actually translated into increased business for DHL Express? Haven’t seen it yet, but I think some companies will look to be patient. They’ll wait to see how that plays out. The traditional peak for air and ocean is really in the summer months, whereas mine is US Thanksgiving through Chinese New Year. So I think what will happen is if things don’t recover, you’ll start to see some of that pressure around the summertime, which may mean more business for those of us in the fixed networks and Express come Q3 and Q4. Do you have the capacity to handle that increase? We’re in a very good position within our own network and then we can leverage commercial lift and charters to supplement. And we’ve we’ve shown historically through the pandemic that when big rushes of volume came on, we were able to manage and handle it. I’d expect we’d do the same. I I would like to see a bit of a peak again where that’s my challenge managing the capacity. Romain was talking about all the snafus in the global shipping networks. What about the collapse of the Baltimore Bridge? Because initially it led to the complete closure of the Port of Baltimore, but we’ve actually seen them open up temporary channels and it now looks like the port itself will be operational months ahead of schedule. What does that mean for DHLUS Express US from the Express side? Not a ton. I mean ultimately that would impact my sister organization on the ocean side more in the immediate. I think the longer term is anytime there are challenges with the supply chain for ocean that can result in increased air usage later on closer to the season where actual inventory needs to be delivered to to consumers. So I wouldn’t see that right away, but that increase, it’s not sticky is it? Is it a temporary boost because it’s just a work around rather than a a permanent shift, very good insights go that’s the reality. I think when we saw the pandemic boost in our volume and a lot of companies shift to air freight, we wondered if some of that would stay and the reality is we kept a little bit of it, but most of it shifts back to I guess the right mode at the right price point that it that that corresponds to that inventory moving and that isn’t always express air. So it isn’t sticky, it’s temporary. I mean I know you have to deal with a lot of the day-to-day issues, but at the same time you’ve got to strategize, you’ve got to think long term, where’s the growth coming from? Like what type of industries do you see really sort of starting to sort of pick up and show a little bit more presence in this space. Well from from my standpoint e-commerce has been continued to be the growth engine that coming out of the pandemic. It didn’t slow down, it didn’t come down, it kept growing. I think what we’re seeing is growth both inbound and outbound. We’re seeing a lot of small and mid size US businesses marketing their products around the globe and we’re helping them reach markets they didn’t have before. And then as people have moved from a China plus one scenario where they’re not just relying on China for goods to come in, we’ve been there to help them open up new lanes, say Vietnam, Sri Lanka, India or in Mexico. But how does that nearshoring trend, though, affect you potentially negatively, right? I mean, I understand that if you’re just shifting suppliers from China to another Asian nation or to to Africa or somewhere else, you still need transport. But as you know, the Biden administration here has made a big deal about trying to do more stuff right here within the US Does that have an effect on you? It might over time If. If true protectionist policy came in and everything was being made and distributed in the US, I’m an international business, not a domestic one. That would have an impact. But what we’ve seen is globalization trends. We did a connectedness survey that showed globalization and global trade is still prominent and growing. It just means different lanes shift over time. And being in all countries and all world around the world, it really does put us in a good position to help wherever that trade flow shifts.