Industry should focus on value creation, says DHL Express India MD R.S. Subramanian

‘Globally, business momentum has been good in Q1, Q2, Q3’

DHL Express India, the logistics, parcel-delivery, e-commerce shipping and international supply chain management unit of Deutsche Post DHL Group, says it would continue to invest in India to tap growth opportunities. R. S. Subramanian, senior VP and MD at DHL Express India shares his outlook for the industry and the company. Excerpts:

What was the experience during the peak of the pandemic?

Logistics is not going away. Essential services are essential. Goods and PPE kits had to be delivered. There are so many businesses which are in the essential sector, it might be hospitals, life sciences, pharmaceutical companies and the whole ancillaries who support them. All of them needed to be up and running, and therefore, the logistics industry was called upon to provide this support.

The challenges on the ground were very many in terms of controls at city, municipal and ward-level lockdowns. There were red zones. A lot of customers were working from home and we had to coordinate with them for delivery.

But I think from that time onwards, into a month or two later [in 2020], the rebound from low volumes of April into May into June was very, very strong.

So, we have seen all-time lows and all-time highs since then, and the rebound has been very, very strong. Trade recovery was quite good across sectors towards the latter half of 2020 and that momentum continued into 2021.

How do you see the future?

The comeback by the businesses is strong so, in that sense, 2021 is a very strong year compared to 2020. There will be recovery of businesses across sectors. High volumes and greater trading capacity and newer expansions and relocations will continue. We are aiming at adopting a digital and paperless approach.

How much have you invested in India?

The company has announced to invest €690 million between 2020 and 2022 to build and expand its facilities in key growth markets of Australia, Japan, Hong Kong S.A.R. and South Korea.

In 2017, it invested €14 million in expansion and relocation and setting up new bases at various places in India.

In 2018 and 2019, €1.7 million and €3.2 million were invested, respectively. In 2020, we invested €3 million and €56 million in 2021 in India.

What is your investment plan here?

There has not been a single month where we have not invested. Almost every month we have done something or the other. IT, expansion, training people are some of our major areas of investment. Every month or two, you will hear from us about something or the other coming.

What are your expectations from 2022 and what are the challenges?

India is a very good market for business. There are all the signals to do good business here. COVID is not over yet. Keeping our people safe is utmost priority. I believe that the logistics sector’s focus will be to simplify, digitalise, and automate trade processes.

What is your ESG roadmap?

We have switched to the ESG framework. By 2050, we want to be a carbon neutral system. Our network is full of carbon and we must work hard to minimise it.

There is a variety of work that is done across the network. We want to go paperless and switch to a digital approach. We are proud to receive the ‘Great Place to Work’ certification both in India and globally for many years now. We will keep valuing our employees.

How has 2021 been in terms of business?

2021 has been great from a business point of view in terms of results. Globally, the numbers have been excellent, its all-time high record in 2020.

It’s possibly 30-odd percent above what we did in full year 2019, so on a comparable basis, that’s the kind of business levels we are seeing. The momentum has been good in Q1, Q2 and Q3 globally, and so therefore it’s a very strong position. We started with a five-year strategy document to deliver excellence in a very digital world which is coming up and I think we’ve done extremely well in that sense.

The performance of the India business has been equally stronger than what we see at a global level.

2021 was a very, very good year. Some of it is because of base effect of 2020, but towards the end of 2020, the latter half of 2020, we did very, very well.

Our people-first approach which is taking care of employees by providing them with medical facilities, free vaccination, IT support for better work-from-home experience, allowed them to work effectively. We also maintained a close connect with our customers.

The Centre is looking at reducing logistics cost for firms. Is the cost coming down and is it helping SMEs?

The focus from the industry should be on value creation. Customer satisfaction should be priority.

One of the biggest trends amidst the pandemic was e-commerce.

There was a B2C boom because the style and channels of delivery were changing. SMEs must understand this change.

We introduced the ‘Yellow Yatra’ plan where we provide financial aid to the SMEs and act as an advisory body for them.

We developed a platform ‘GoTrade’ where SMEs can use this to trade their goods and make their mark on the global map.

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