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Express Challenges

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Submitted By flankerhung
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1. Q1 Normal Express Service = Day definite service a. DHL value added service i. Warehouse ii. Distribution Center iii. Time definite service iv. NFO: Next Flight Out 1. Normally use DHL /commercial scheduled flight v. Dedicated vehicle 1. Dedicated truck / flight vi. Break bulk 1. DHL BREAK BULK EXPRESS provides door-to-door delivery of shipments that are consolidated at origin, sent from one customs zone to another, then deconsolidated by DHL at destination before delivery to different addresses within the same country or customs union. The consolidated shipment is cleared as a single entry on arrival at the destination facility. vii. Medical viii. RMA b. Values i. Reduce lead time on transportation ii. Reduce cost iii. For factory in case of production break down, replacement parts can in place in short time, and minimize production impact iv. Break bulk, e.g.1000 shipments group as 1 shipment for customs clearance can reduce clearance time and delay v. RMA 1. Can help management return process c. Changes i. Manufacturing industry now use JIT Just In Time production strategy 1. OLD METHOD: production in batch (10000 pieces) 2. JIT : Based on demand in period -> design number of pieces 3. JIT require accurate and quick transportation ii. Globalization is the trend for do business 1. Supply chain across the world a. E.g. manufacturer in China b. User in USA c. Parts / raw material provided in EU 2. If Localization reappear, demand for transportation around the word will reduce. 2. Target clients a. Manufacturing companies that using JIT approach especially automotive, pharmaceutical, healthcare, electronics, consumer goods that are time sensitive. b. Factors for choosing express courier/ logistics provider i. Price ii. Lead time iii. Service/ quality iv. Damaged / missing shipment v. Customs clearance time 1. DHL fastest in Europe 2. UPS fastest in USA vi. Value added service 1. Cross-border truck 2. DC 3. Break bulk 4. Third party billing 3. US is the biggest economic value country in the world, the logistics market in US is worth $46.9 billion USD in 2004 which accounts for nearly half of the worldwide express revenue. a. The biggest challenge for DHL to growth in USA is: they are not an American company. b. Traditional, DHL and TNT are the leaders in Europe , UPS and Fedex are the leaders in USA. As UPS is planning to acquire TNT in coming months, UPS will become the largest express company in the world with the largest market share in both Europe and US, one of the possible strategy for DHL is try to seek coorperation with Fedex. May be DHL can set up an Alliance group with Fedex, something like airline or shipping company alliances. This can provide easy point for DHL to gain market share in USA. 4. In most of the case, cost can be the most critical factor affecting company to choose the express provider. DHL may promote some of their target segment/ customer with attractive spot rate, so to attract customer to TRY DHL services. Once the quality is up to standard: can deliver shipment in perfect condition within the committed time, customer may use DHL more and more 5.

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