In its new group strategy launched Tuesday, Deutsche Post DHL Group said it will be “stepping up the digital transformation” currently underway across its divisions, as well as focusing on the “profitable core” of its various logistics divisions, driven mainly by e-commerce.
While DHL is already heavily focused on digitalization in its various business divisions, the company said it will be picking up the pace of its technological advancements with an investment of about €2 billion through 2025. The investment will go toward modernizing DHL’s IT systems, process automation, widening the application of data analytics, integrating new technologies throughout DHL’s business, and training employees on new technologies, among other things.
Regarding the profitable cores of its various business units that it plans to develop, DHL identified the following:
- DHL Express’ core is the Time Definite International (TDI) product for premium, cross-border shipments of time-critical parcels and documents.
- DHL Global Freight and Forwarding’s core is international transportation via airfreight, ocean freight and road freight, including customs clearance and other value-added services.
- DHL Supply Chain’s core is warehousing and transportation.
- One of two new divisions spun out of DHL’s former Post-eCommerce-Parcel division, DHL eCommerce Solutions’ core includes domestic last-mile parcel delivery in countries outside of Germany and non-TDI cross-border services to, from and within Europe.
- The second spun out division, Post & Paket Deutschland’s core includes transporting, sorting and delivering documents and goods within Germany, as well as exports from the country.
These sectors have all been driven by growth in e-commerce traffic globally, and that will likely continue to be a major driver in DHL’s growth. “We are the only company that is able to offer single elements as well as the entire e-commerce supply chain on a global scale,” said Frank Appel, Group CEO. “This is our key differentiator.”
With the investments, DHL also expects to see increases in its operating profit (EBIT) and is targeting EBIT of at least €5.3 billion by 2022.