Deutsche Post DHL Sees Diversified Supply Chains Due To COVID-19

Deutsche Post DHL has reported that it has seen an increasing number of customers and clients diversifying their supply chain networks during the global pandemic.

Oscar de Bok, a management board member at Deutsche Post DHL, said: "There is an increased tendency to organise different sources of supply to reduce dependency on one country or one production site in a strategic way,”

"The desire for more flexibility in the supply chain has become more prominent, and that plays to our strength as a contract logistics provider."

To support the increasing demand and need for flexibility in the supply chain, Deutsche Post will invest in digitisation. The investment will cover 1,000 new robots, which will operate and help to reduce the need for manual labour throughout the supply chain.

Shipments from the food and pharmaceutical industries have been sustained at high levels of demand for Deutsche Post, whilst the automotive industry also continues to recover and reach normal levels of production. The fashion and retail sectors continue to struggle whilst the majority of high street stores remain closed in a number of countries. The winter season is expected to be cautious by de Bok.

Regionally speaking, Asia is currently operating at a stable state, whilst northern Europe, hit hard early on by the coronavirus pandemic, is recovering faster than experts expected it to. North America has remained relatively stable throughout, with a number of workers experiencing little downtime in their roles.

Whilst business with the pharmaceutical industry continues to grow for Deutsche Post, it becomes increasingly crucial to field hospitals and intensive care units with its industry-leading logistics operations. The company is also prepared to aid in the distribution of any coronavirus vaccination.

Earlier in the month, Deutsche Post reported that business in Europe was showing signs of returning to normality, despite first-quarter earnings being dragged down by the impact of the COVID-19 disruptions.

Express shipments improved in April following a decline in March. Parcel volumes soared to Christmas levels in early April before slowing down to a normal level in the second half of the month. "Fundamentally the trend towards e-commerce will speed up," chief executive Frank Appel said. 

Express deliveries in China have also experienced strong growth since March, with stabilised growth throughout April. 

Whilst global freight volumes were down in the first quarter of the year, Deutsche Post was able to compensate for this with higher margins in air freight. The fact that the company owns its own fleet of aircraft made this easy for it to carry out.