Insider Q&A with CEO of Deutsche Post AG
Like its U.S. rivals, DHL Express is entering its busiest time of year, delivering Christmas parcels to consumers in dozens of countries around the world.
That means hiring more staff and making sure the network can handle the seasonal surge in volume.
Though not as familiar to American consumers, DHL’s parent company, Deutsche Post AG, has more employees than either FedEx or UPS.
Frank Appel, 57, runs the Bonn, Germany-based giant. Appel studied chemistry and neurobiology and was a consultant for McKinsey & Co. before joining Deutsche Post in 2000. He was named CEO in 2008.
Appel recently spoke to The Associated Press about the outlook for peak season, the importance of automation, a niche role for drones, and advice to people who are just starting their careers. The answers have been shortened for brevity and clarity.
Q. Christmas is right around the corner. What kind of shipping volumes do you expect?
The Christmas period is always our strongest quarter of the year. We expect a very strong Christmas period this year because worldwide we have very good growth, we have decreasing unemployment around the world.
Q. Do you have a percentage increase over last year in mind?
This is always a very tricky one. It will be definitely more than 10 percent, in the U.S. as well.
Q. How are you preparing for that volume?
We always start really early (in) summer with planning. The forecasts are based on discussions we have had with our customers, what they predict, our own experience about patterns, and then we really start securing employees, securing trucks for line-hauling, capacity for the airplanes, enough sorting capacity, how you bring them to the network. It’s not only science, it’s a little bit of art as well.
Q. Are you confident you can handle the increase?
We are very confident. It’s a similar challenge if natural disasters are happening, which are completely unpredictable. We believe we are always the first who are back to work and have our operations normal. That’s somehow part of the DNA the whole organization has now for many, many years. And that shows as well at Christmas: what are the unpredictable forces? It’s traffic, it’s snow, and in some parts of the world it’s ice on the street, and then you have to find ways how you deal with that. This is a little bit the moment of truth, and our people are so excited that they say now really what counts is that we get it done.
Q. How many seasonal workers are you hiring this year?
In Germany we are hiring about 10,000. In the U.S., where we are of course significantly smaller, about 3,500.
Q. DHL benefits from a strong global economy. What is your economic outlook for 2019?
We have definitely seen a very good year this year, and our assumption is that it will go back to the levels that we have seen before, so something between 3 and 3½ percent growth. The reason is uncertainty in the market due to political questions. One is imminent with Brexit, then what the relationship between China and the U.S. is with regard to trade. That is currently still more psychology impact than real impact, but psychology is very important for business.
Q. Are tariffs reducing international shipments?
We haven’t seen in our numbers any major slowdown, but some of the duties between the U.S. and China become only effective Jan. 1. It’s still only a part of the global flow ... there are many other strong trade lanes. We are not particularly nervous, we are concerned because global trade is a win-win and not a lose-win situation.
Q. A technology question: Will DHL use drones for deliveries anytime soon?
We have several pilot (or trial programs). A lot has to happen particularly with the batteries because you need the capacity. If you have to recharge them every other hour then you need so many drones and you have to orchestrate that. It has to be commercially viable as well. The efficiency of couriers is still high because the complexity is high, too. What our couriers are doing is completely underestimated by the public. They think that’s an easy job. To really provide great productivity and high quality, know where the people live, which bell you have to ring, that deserves quite a lot of knowledge. To program that in IT is not that easy and not cheap. I think they (drones) are still a way out.
Q. To end on a different subject, do you have any advice for young people just beginning their careers?
Very often you hear, ‘Do that what you enjoy.’ No, no, no. This is nice as well, but do what is easy for you. I enjoy mountain biking, but I will never win with my talent in a race and I never want to race. It’s not easy for me. To manage, that is not fun because nobody likes controversial dense and difficult discussions, but it’s relatively easy (for me). That’s No. 1. No. 2 is, I always selected in my life to work for people I enjoy working for. I only once in my life worked for somebody I didn’t enjoy, and I stopped that finally because life is too short to work for the wrong people.