DHL’s call to arms

When DHL, the international delivery service company with operations in Trinidad, moved into its new  building in El Socorro, San Juan, in early January, it was all about fighting for new turf and keeping the competition guessing. Last December, the company took down its banner billboard on the ground floor of Furness Building on Independence Square, Port-of-Spain, a building that had become its home base since it began operations in TT in 1981. Since then, the company has slowly carved a niche for itself in an industry that has no room for mediocrity. Even before the building at El Socorro went up, DHL always had its hands full,  going up against another corporate giant in the delivery service, FedEx.

The courier landscape has since changed. Now companies like UPS, TTPost, POX International, and those companies involved in the “sky-box” business, have entered the market thus forcing companies like DHL to tweak its operations and strengthen its competitive armour. Global airlines too have sought to cash in on the courier business as they see it as an avenue to enhance their bottom line. “Every body has a little hand in the pot,” says Alex McCarthy, DHL’s country manager in Trinidad. But DHL, he says is taking nothing for granted. “We are going to meet them toe to toe,” says Michael Roberts, DHL sales and marketing manager in Trinidad.   

DHL’s new base of operations, a three-storey building,  covers some 13, 000 square feet and will cost “a few million dollars,” according to McCarthy. Their Furness Building office will now become a drop off point. McCarthy says DHL is keeping its eyes on the burgeoning oil and gas industry, and wants to take advantage of that growth. Both men described it as a state of the art facility. McCarthy said DHL had outgrown its operations at Furness Building. The building is quite visible from the Churchill Roosevelt Highway. The company now services 13 Caribbean islands, and will need every inch of space if it is to crank out more volumes. “We can move anything, from an envelope to a 40-ft container,” McCarthy said. Many people, he said, tend to forget that DHL started off in Trinidad and Tobago as the first international courier company. FedEx, another household name in courier service, came a few years later, reminds McCarthy.

Asked why the perception is that FedEx has gotten the jump on them, the country manager put it down to marketing, noting that they had not been as aggressive as they should have been. That will soon change, he said.     Together, DHL and FedEx account for 60% of the domestic market, a figure that runs into millions of dollars. McCarthy, who came back to Trinidad in 2001 after his stint as district manager for the Eastern Caribbean, though reluctant to give a dollar figure, said in terms of volume about 35, 000-40, 000 pounds of packages move through TT per day. Most freight though is in-bound in TT, he added.

DHL has its flight plan mapped out. Their 727 aircrafts come into TT twice per day, each holding about 50, 000 pounds if it needs to. McCarthy recalls the days when DHL used a Cesna to move packages out the country and started its courier service with bags in hand. The blue prints for the Twin Towers, for instance, were brought by DHL to TT. “We gone from a mosquito to a bat,” said McCarthy. The owners of DHL know the power of the brand that they have. In  2003, Deutsche Post World Net, owners of DHL, put all worldwide express and logistics together. As a result, two other major Deutsche Post companies — Danzas and Euro Express — were united under the DHL brand. Profits generated by the company is about US$27 billion annually. “It’s a powerful brand,” McCarthy said of DHL, noting that those three letters are recognised anywhere in the world.

The DHL global Web site says its network links over 120,000 destinations in 228 countries and territories, and employs 71,000 people. DHL is majority owned by  Deutsche Post World Net. Other shareholders include Lufthansa and Japan Airlines. DHL is the third largest courier after FedEx and UPS in the US, says McCarthy. It’s outside the US that DHL throws its weight around, he adds, noting that it has the edge in  Europe as well as in Asia and Central America. McCarthy said DHL’s best selling tool is its service. “Price is the last thing we want to compete on,” he said. Robert’s view is that for DHL to expand, it needs to build the local market and expand out into the Caribbean and Latin America. “We have a very competitive market and formidable opponents,” he said.

The company might just be changing its business tactics. “We’re going after the market hard,” Roberts said. DHL’s strategy, he added, is going to be the direct approach — making direct presentations to CEOs and executives. “Business to business,” is how Roberts puts it, a phrase that has become the buzzword in corporate circles. But, he said he is also aware that DHL has to respond to marketing needs. Both managers know that FedEx is watching their every move. Both also know that for DHL to clip their competitor’s wings, they have to woo more customers. DHL may be fine-tuning its courier business, but it  is not averse to spreading its business wings into other areas. The company has gone into logistics management, a business that is proving to be quite lucrative, noted McCarthy. This includes warehousing, distribution and storage for local clients, both big and small. They already have Dell computers on the balance sheets, housing 10, 000 computer parts in an 8, 000 ft warehouse in West Trinidad. McCarthy stressed that this was a separate business unit from DHL’s core business. Hewlett Packard, too, is also a DHL client, storing computer parts in another warehouse facility for the global computer company.