Hendrik Venter, CEO Europe Middle East & Africa, DHL Supply Chain on the future of freight
DHL Supply Chain in the Middle East stands as a beacon of innovation and efficiency in the logistics landscape. With its strategic geographical positioning and state-of-the-art technology, DHL is not just delivering packages but is also shaping the future of trade in the region. The company leverages cutting-edge solutions like AI-driven forecasting and drone delivery systems, ensuring it stays ahead of the curve in a dynamic market.
As it intertwines robust infrastructure with sustainable practices, DHL is committed to reducing its carbon footprint while enhancing service reliability and speed. Through partnerships with local enterprises and multinational corporations alike, DHL Supply Chain is a critical player in driving economic growth and bridging markets across the Middle East, making it an indispensable pillar of the global logistics network.
1. Let’s talk about your experience in the industry and at DHL Supply Chain.
I became CEO of DHL Supply Chain Europe, Middle East, and Africa in October 2019. Before that, I was CEO for our Central Eastern European business and held several management-level roles throughout the EMEA region since 2009, focused on growing our contract logistics portfolio across multiple sectors like e-commerce, Life sciences Healthcare and automotive mobility. As CEO, I am responsible for 22 countries across the EMEA region, 36,000 employees with operational facilities covering 15 million sqm and over 700+ customers across various sectors. My focus is on growing the business, but the approach has evolved as we double down on developing innovative, sustainable, and best-in-class solutions for our customers and entering emerging markets.
2. How has DHL Supply Chain adapted its operations to address recent challenges in the logistics industry, such as supply chain disruptions and labour shortages?
Inflationary pressures and broader economic instability in the past year are causing more cautious investment but are leading customers to increase their reliance on strategic partnerships to help drive growth. This is an opportunity for us to add value while helping customers find operational efficiencies.
By tapping into our global scale, we have been able to help our customers quickly respond to disruptions. We have leveraged the power of robotics to help combat labour challenges. Our use of collaborative robots allows us to quickly ramp up during peaks or even scale down during unexpected lulls. We have also seen improved turnover rates at warehouses that use technology, which indicates that our associates enjoy working with our digitalization solutions.
We are also using technology to help us better plan and anticipate supply chain disruptions. Our control towers are a good example. They give us complete visibility of our customers’ end-to-end supply chains, and we can use customer and industry data to develop more resiliency.
3. What is your take on digital transformation, and how do you see DHL Supply Chain embedding for a better output?
DHL Supply Chain has been at the forefront of digitalization. Currently, over 90% of our warehouses globally have been touched with various digital technologies, while in the EMEA region, that figure stands at 100%. Our Accelerated Digitalization strategy has guided how we develop, deploy, and continuously improve technology. We use advanced technologies like artificial intelligence, robotics, the Internet of Things (IoT), and data analytics to optimize our supply chain processes, improving efficiency, productivity, and customer satisfaction.
For example, DHL Supply Chain has deployed robots to automate repetitive tasks, freeing our employees to focus on more complex tasks. We are also using AI-based demand forecasting tools to accurately predict future order volumes, helping us to manage inventory and resources better. We have also invested in IoT technologies to enhance real-time tracking capabilities, providing customers with better visibility into their supply chains. To date, over 350 facilities within the EMEA region are equipped with digital technologies, equating to 6700 deployed devices.
4. Are there any specific industry trends you are currently observing?
- Supply Chain Resilience: The global disruptions caused by the pandemic have highlighted the need for supply chain resilience. This involves diversifying suppliers, increasing inventory visibility, and using predictive analytics for better demand forecasting. Our control towers have been crucial in helping us to improve resilience in our customers’ supply chains. Control towers provide end-to-end visibility across the supply chain, enabling DHL to track and monitor shipments in real-time. This visibility is crucial for identifying disruptions early and taking swift corrective action. By analyzing data from multiple sources, control towers can predict potential disruptions, from weather events to traffic congestion, allowing DHL to proactively mitigate risks for our customers.
- Digitalization: DHL invests in digital technologies to enhance supply chain visibility and efficiency. Our digital platform, MySupplyChain, provides our customers with end-to-end visibility across the supply chain.
- Sustainability: There is a growing emphasis on eco-friendly practices, driven by increasing environmental concerns and regulatory pressures. This includes adopting green vehicles, optimizing routes to reduce fuel consumption, and minimizing waste. DHL has set a target to achieve zero emissions by 2050. We are investing in electric vehicles and sustainable energy solutions, among other initiatives.
- E-commerce Growth: The pandemic has accelerated the shift towards online shopping, increasing demand for efficient last-mile delivery solutions and return logistics. We have, therefore, expanded our offerings to handle e-commerce and other value-added tasks such as packaging and reverse logistics.
- Automation and Robotics: DHL uses robotics and automation in our warehouses to increase efficiency and accuracy.
5. Sustainability is taking centre stage; how is DHL Supply Chain focusing on reducing its environmental impact?
DHL Supply Chain is taking significant steps to reduce our environmental impact, which aligns with DHL Group’s commitment to achieving zero emissions by 2050.
- Alternative Fuels and Electric Vehicles: DHL is gradually transitioning its fleet to electric and low-emission vehicles. This includes both small delivery vans and larger freight trucks.
- Energy-Efficient Warehouses: DHL invests in energy-efficient technologies for our warehouses, such as LED lighting and solar panels. By the end of 2025, we aim to achieve operational carbon neutrality in all our 1,500 warehouses globally. This target is a cornerstone of our environmental strategy, and as of the end of 2023, we have achieved nearly 100% green electricity usage. DHL Supply Chain is shifting from gas-based to electric heating in our warehouses and ensuring that new warehouses are carbon neutral by default.
- Sustainable Supply Chain Solutions: DHL provides consulting and practical solutions to help customers green their supply chains, from design to implementation and management.
- Transport is another key focus, a significant contributor to our carbon footprint, with approximately 96% of DSC’s emission footprint. Addressing this, DHL Supply Chain has implemented the Green Transport Policy, a strategic initiative for decarbonizing transport solutions. This policy mandates using green alternatives for transitioning the fleet, including hydrotreated vegetable oil, biogas, and electric or hydrogen engines. We aim to convert around 2,000 vehicles globally to these cleaner solutions in the next three years. By 2030, the target is a 30% share of sustainable fuels and technologies in road transport, a significant step towards reducing their environmental impact.
- Collaboration is key to achieving these goals. To achieve our sustainability goals, we are dependent on collaboration with OEMs (Original Equipment Manufacturers), carriers, governments, and our customers. OEMs play a significant role in speeding up and scaling electric truck production, and governments establish necessary infrastructure like electric charging stations for trucks.
6. how often should there be supply chain transformation?
There is not a single, perfect schedule for supply chain transformation. Instead, it should be seen as a continuous process of adapting to changing circumstances and leveraging innovative technologies to create a more efficient, resilient, and agile supply chain. Several factors will influence how often a company should revisit and adapt its approach.
- One key driver is the constant advancement of technology. The supply chain world is brimming with new tools and processes that significantly improve efficiency and agility. Companies should stay informed about these developments and be prepared to integrate them into their supply chains when they offer a clear benefit.
- Another factor is a company’s own business needs. As a business grows or its goals shift, its supply chain requirements will inevitably change. A transformation may be necessary to adapt to new markets, product lines, or ever-evolving customer demands.
- Disruptions are another consideration. Unexpected events like pandemics, natural disasters, or trade wars can expose weaknesses in a supply chain. A transformation can help build resilience and agility, allowing the chain to adapt to future disruptions and minimize their impact.
Finally, even without significant disruptions, there’s always room for improvement. Companies should regularly evaluate their supply chain performance and identify areas for optimization. This can lead to ongoing, smaller-scale transformations that keep the supply chain running smoothly and efficiently.
7. Where will the industry move forward in the next five years?
I foresee a logistics landscape in the next five years that is heavily influenced by technology and driven by efficiency, transparency, and customer focus.
- Talent Remains Priority: While technology will be a game changer, companies will continue to prioritize hiring top talent, as it is critical to the success of any business. Also, as the logistics industry continues to grow, competition for this talent will heighten, and companies will need to be innovative in attracting and retaining employees. The skills required to be successful in the logistics industry will also evolve to keep pace with technology like artificial intelligence, data analytics, and automation.
- Tech Taking the Wheel: Automation will be a game-changer, with robots taking over repetitive warehouse tasks, improving accuracy and speed. Expect to see autonomous vehicles on the road, streamlining transportation and potentially reducing costs.
- Data Deluge: Logistics will be awash in data collected from sensors on vehicles, packages, and throughout warehouses. Advanced analytics will use this data to optimize routes, predict demand, and identify potential disruptions. Artificial intelligence (AI) will be vital in making real-time decisions and streamlining operations.
- Evolving Ecosystem: Logistics will move towards a more integrated ecosystem, with different players working seamlessly. Cloud-based platforms will facilitate communication and collaboration, ensuring all parties are on the same page.
- Customer Centricity: With competition heating up, logistics companies will prioritize customer experience. Expect faster deliveries, flexible options, and greater visibility into the delivery process. Sustainability will also be a growing concern, with companies looking for ways to reduce their environmental impact.