How DHL Express is preparing for an e-commerce boom
The growing levels of globalisation and digitalisation mean a strongly increasing number of merchants are selling globally and online marketplaces, such as shopping apps via which customers can choose from offerings worldwide.
As a result, this has meant that cross border trade has only increased in prominence over the past few years. To add to that, COVID-19 has meant that consumers are moving to e-commerce at a rate like never before. This will only increase during the popular mega shopping days such as ‘Black Friday’ and ‘Cyber Monday’. As a result, DHL Express is expecting an all-time high in e-commerce trade globally. Having already overseen around 35% e-commerce volume growth during 2020 in its network, the upcoming peak season will further accelerate this and will mean higher shipment quantities above 50% compared to last year’s peak season.
“Megatrends such as globalization and digitalization have an enormous impact on global trade,” commented John Pearson, CEO at DHL Express. “In recent decades, we have seen how globalization, increased trade and interaction have raised prosperity and choice, reduced poverty, cultivated diversity and enriched lives. At DHL Express it is our mission to enable global trade and support our customers during the most important days for their business. We make sure that goods are delivered as fast as possible - and Christmas gifts are being delivered to households all over the globe in time. We are proud of the strong commitment of our employees and couriers who are out there to fulfil our mission of connecting people and improving their lives. In times when the coronavirus hits both economy and private lives, their efforts are outstanding.”
With more than 100,000 employees worldwide and active in over 220 countries and territories, DHL Express has taken a number of precautionary measures, not just at the level of offering face masks but also introducing social distancing and working from home where possible. DHL has also implemented safer delivery procedures for receivers, without the need for customers to sign for their shipments. DHL has introduced these standards in a bid to continue to operate undisrupted but with safety at the forefront.
“COVID-19 and its impacts such as curfews or distancing led to massive changes in the retail sector all over the world”, says Michiel Greeven, EVP Global Sales at DHL Express. “As a consequence, the buying behaviour of consumers, but also B2B Buyers, changed significantly and shifted more and more into the online world. From an e-commerce perspective some might even say that Covid-19 brought 2030 to 2020, with online shopping and the necessary shipping as the new normal. And this not only counts for B2C retailers but also in the light of B2B E-commerce. Particularly in current days of uncertainty many giant stores will be going online with their sales promotion. This will have its effect on peak season as well and shoppers will be mainly going online to get the best deals instead of going to physical stores. With the result of fast shipping needs as well.”
Uber Freight to Acquire Transplace in $2.2bn Deal
Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn.
The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.
Uber’s Big Play for Supply Chain
Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services.
The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.
Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding.
Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron.
Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added.
History of Uber Freight
Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany.
The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.