DHL invests in the last mile

VIRTUAL RETAIL Driven by e-commerce growth of 26.9% in 2021, DHL Express, led by CEOs Mirela Maurtschke (CEO Brazil) and Mike Parra (CEO Americas), is betting on increasing capacity. (Credit: Wanezza Soares)

One of the most traditional excursions for those visiting Cappadocia in Turkey is a visit to one of the artisan silk carpet factories, using an ancient local technique. There are several sizes, shapes, colors and designs to choose from. Some of them have been awarded at specialized international fairs. If you intend to close the deal in a physical store or online, the store employee gives you information as one of their selling points: $15,000 worth of models are delivered to São Paulo by DHL, the global leader in the logistics sector, Deutsche Post DHL Group, which last year achieved 81 billion euros. For this, the product must be taken from Cappadocia to Istanbul, a journey of 600 kilometers, and then from Istanbul to GRU Airport, in Guarulhos (SP), for example, on a stretch of 10,500 kilometers across Europe. and the Atlantic. But the most difficult part of the delivery is not this route, which DHL already dominates with its fleet of more than 300 aircraft. The challenge of taking a Guarulhos carpet to an address in the southern zone of the capital São Paulo is the so-called last mile. According to eMarketer, an American market research company, this last part of the shipment accounts for 53% of the cargo’s value.

DHL’s move to improve the last delivery mile has three main reasons. The first, in order not to fall behind in the scenario of strong competitors, such as FedEx, UPS, TotalExpress, Mercado Livre and Amazon Logistics. The latter, for example, already employs 10,000 people directly and indirectly in Brazil, and the ambition is to continue strong growth in the coming years, according to Rafael Caldas, the CEO who leads the company in the country. Next week, a new distribution center will be opened in Indaiatuba, in the interior of São Paulo, to meet demand in the Campinas region.

FOR HIGHER EFFICIENCY In land mode, the main investments were in team, fleet and technology expansion. (Credit: Disclosure)

The second is the expansion of Brazilian e-commerce. In 2021, the sector grew by 26.9%, with a turnover of R$161 billion, according to data from Neotrust. Analysts estimate that this year the increase in online sales will be between 5% and 10%. And the third — a consequence of the second — is the projection of the market for this type of delivery. According to the World Economic Forum’s report The Future of the Last Mile Ecosystem, by 2030 there will be a 78% growth for urban last mile deliveries.

To meet this growing demand, DHL leveraged its physical structure and technology. In Brazil, the company has five delivery centers (which handle from the point of sale consultation to the delivery of the product to the customer), a warehouse of 300 thousand m², 6.5 thousand dedicated employees, 55 transport hubs and 800 vehicles. The company is bringing to the country DHL Fulfillment Network, a multi-client delivery network that helps execute the entire e-commerce logistics. Aimed at medium and large industries and retailers, the solution solves the pain of last-mile transport managed by DHL in major metropolitan areas and in partnership with strategic players.

In the last two years, DHL Supply Chain’s transportation business has doubled. In the land mode, the main investments were in the expansion of the team and the fleet, in technology, in strengthening the branch network, in the air hub at Guarulhos airport and, mainly, in the creation of the Transport Matrix in Jandira (Greater São Paulo city), uniting the Control Tower and the National Breakaway Cargo Consolidation Hub at the same location. With an area of ​​190 thousand m², 40 thousand m² of warehouses and 130 docks, the structure consolidates fractional loads, with departures and destinations throughout Brazil. The pinnacle for the development of customized solutions, where deliveries are made to hospitals in the hands of doctors or deliveries within business environments. The expansion of road and air traffic to e-commerce, which continues to grow in Brazil, is also new. In July, DHL Express Brasil announced the arrival of the first aircraft fully dedicated to serving the company’s clients, a Boeing 767 with a capacity of 52 tons. “We will increase capacity, improve transit times and offer guaranteed shipments at all times of the year, especially during peak periods,” said Mirele Mautschke, CEO of DHL Express.

These advances are part of $360 million in the Americas (USA, Canada, Mexico, South and Central America, and the Caribbean). According to Mike Parra, CEO of DHL Express Americas, the projects are expected to improve operational efficiency and increase network capacity by nearly 30% by the end of 2022 in the region. “The growth of e-commerce will continue to put pressure on the industry’s air cargo capacity, which has led to continued investment in new aircraft and dedicated routes,” Parra said.

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