‘I don’t believe in the new normal’: DHL Express boss John Pearson says pandemic was boon for the logistics sector
Q: What’s the new normal in this VUCA world? A: I don’t believe in the [term] ‘new normal’. The world has changed a lot in terms of working from home and things like that. But when we talk about logistics and supply chain, things haven’t changed much. Like, people now look at the Icelandic ash cloud crisis of 2010 as a weather thing. [But] it was a major logistical catastrophe, where no aircraft, including DHL, was flying over Europe for those 30-40 days. Everyone said they were going to change their supply chains… that they were going to bring them closer to where consumption was happening through nearshoring and reshoring. What happened? Nothing! When we think about Covid-19 and its impact on supply chains—which has been a hot topic of discussion—supply chain and logistics companies did extremely well during the pandemic. Not only with all the normal things that people move, but also with vaccines. Some people claimed that logistics companies would struggle to deliver vaccines. However, logistics companies, including our competitors and freight forwarders, did a fantastic job of delivering all the vaccines, without any spoilage, to where they should be consumed. Thus, the pandemic was an extraordinary time for logistics companies to be acknowledged a little bit more for what they do. Q: How have the global supply chains been impacted? A: Some organisations are thinking about supply chain resilience going forward. What does that mean? That means China-plus one. [They are] thinking about whether they should set up a manufacturing base in Vietnam, Thailand, the Philippines, Malaysia or India. One of the outputs of global trade in the DHL Trade Growth Atlas [an annual report on global trade growth trends and prospects] was that those countries are benefitting from some of the reshoring activity to create supply chain resilience. Don’t forget that for more than 24 months, different Chinese cities were in some state of lockdown. So that is a little bit of the new normal. By and large, the only other thing I would comment on is that we have redoubled our efforts in terms of our global aviation strategy to make sure we have more aircraft and more optionality to make sure that our partners are just as flexible as we have always imagined them to be. We added over 100 aircraft in the last two years. And that was to make sure that we could supply transportation to our customers because transit time is what they require from us. And without transportation, there is no transit time and without transit time, there is no quality. Q: Have the Covid-19 pandemic and subsequent geopolitical events led you to reorganise operations? A: I don’t think we have reorganised operations. We always need to be very tuned into the challenges. Being a truly global organisation, we [quickly] responded when the Russia-Ukraine crisis happened. We responded to the energy crisis by buying more warm clothing for the people that would typically use central heating in offices in case of energy restrictions. We closely watch the trends and react to them. Being a global company with people in 220 countries, we adapt to any news coming our way. But, as I mentioned, we have had to reorganise our aviation fleet to add more aircraft; we need to have them in different places and we might have to accelerate some of our big hub infrastructure. Since we are opening up a large hub in Copenhagen [this year], we need to be equipped to handle the volume of goods that will be coming our way. Q: Other than reaching Covid-19 vaccines to different geographies, what are the other old- and new-economy segments that you see driving the growth in logistics? A: We are in six verticals—automotive, chemicals, consumer, energy, life sciences & healthcare, and the public sector. If you look at their sub-sectors, that goes up to 35. If you asked anyone if DHL was relevant in any of those verticals or sub-sectors, the answer would be yes. During the pandemic, all industries were growing fast, but life sciences & healthcare was particularly strong. As we came out of the pandemic, automotive started coming back and so did the search and demand for semiconductor chips. All industries have benefitted and will be fuelling our growth going forward. E-commerce is another great example. During 2020, they had literally three or even four years of growth in just four or five months to cruise at a new altitude. Although the demand for […]
