Saturday 20 / April / 2024
Deutsche Post DHL Group CEO Frank Appel shares his Group’s strategy and expansion plans in Oman in an interview with Abdulla Al Rubai, Senior Broadcast Journalist, Oman TV and Ms. Garima Bhandari, Programme Director, Times of Oman.
Q: We understand that you, Dr. Appel, have an MSc in Chemistry and a PhD in Neurobiology. You are one of the most successful leaders, what is your secret for success in logistics and leading one of the best brands, DHL?
This is a good question, may be the secret is that in my career I always focused on things, which were in a way I had a flair for and perhaps that is why I was probably doing things better than others. In addition, I also had some luck when getting into the different jobs. Finally, and as it often happens in life it was the combination of the two elements, performance and good fortune. Studying Chemistry as a scientist was comparatively easy for me, and I was probably a good consultant as well. It seems that I have the necessary people skills in working with teams and transforming people’s inputs and strength into solutions. And, in addition, as a leader and a manager-cum-mentor I have the ability to create momentum in teams. Therefore, I would say it was a combination of the right teams at the right moments and right places.
Q: Oman is having Vision 2040, where logistics plays a major role. Oman is aiming to become among top 10 logistics hubs by the year 2040. We understand that DHL started a brand new facility at Muscat International Airport, is there any other investments line up for Oman?
Yes, you are right, we have signed off on a new facility at the airport. In addition, we are also planning investments for DGF, for our expansion in Salalah. For Oman to become a major logistics hub, you have to attract companies to set up or move their businesses here, for example, by providing the right infrastructure and border processes. For air freight services your country might be in a more difficult situation, but for ocean freight shipments you are geographically well positioned, here you could aim to become a gateway to Africa, Middle East and potentially for Europe.Of course, you also need people with the right skillset for logistics jobs. As a Group, we monitor what is happening in Oman, but we cannot create the demand ourselves, we usually follow and support companies who are using Oman as a transit place or setting up new facilities in Oman. If our business grows here, we will definitely invest more in Oman.
Q: Can you please explain your Group Strategy 2025?
We always develop strategies, which last for a couple of years, because we believe that our employees need certainty and guidance. Our current strategy, “Delivering excellence in a digital world”, covers four elements. Our purpose, ‘Connecting people, improving lives’, comes first. This objective was vividly demonstrated in the last quarters, as we shipped many Covid-19 vaccines around the world. I am always proud to see our DHL planes delivering the vaccines, and I am very happy that our team transported vaccines to Oman. Together with the purpose, I strongly believe that every company should have a clear vision, which in our case is that we want to be “The Logistics Company for the World”. As a next ‘level’, we have our mission in making the life of our customer easier. We call this ‘Excellence, simply delivered in a sustainable way’. Our third element focuses on doing what we are best at: ‘strengthen our profitable core’. Fourth and finally, all this is framed and supported by our dedication towards digitalisation. And, while these are the key building blocks of our Group strategy, it is supported by our different business divisions who create their business strategies based on our overall Group direction.
Q: While interacting with your employees, we have heard the most motivational word at this current period of pandemic “Covid bonus”. How did your company manage to pay a Covid bonus in 2020, while we understand that another one is coming in 2021? This places DHL on a different level: whose brain is behind this and how did your company manage to absorb the cost in this difficult period.
The trigger behind that decision have been our colleagues around the world themselves, because they have done a fantastic job in 2020 and 2021. When COVID-19 hit us, we realised there were three things that are important: health and safety for all our colleagues, excellent service for our customers, and collecting cash in a way that enabled us to pay our people and suppliers. That has worked extremely well in 2020; the energy level of our organisation was just excellent. Since it was clear who had done all this hard work, it was important to let our employees participate in the success. Moreover, we wanted to treat everyone absolutely the same, irrespective of the salaries they earn and where they work.
This year, we have been performing very well again, breaking our records once more, knowing again, who is responsible for that. Our colleagues are doing such an outstanding job for our customers, that we are doing the same again this year, paying a Covid bonus to all employees. We think this is very well deserved, they are working extremely hard under tough conditions such as wearing masks and keeping distance, while delivering to many households. We are doing this because we appreciate their hard work.
Q: Women in Leadership initiative in DHL: can you please elaborate on this and what’s the target for the coming 5 years?
We do not claim to be perfect here, but we have made very good progress. Gender diversity is very important as it makes the company and us all better. I am very happy that also in Oman we have three women in our senior team. Although in some countries we already have a 50-50 ratio between men and women, gender equality is something that still takes some time to be established globally.
Historically, our industry was not very attractive for women, although that is changing now. Men, stereotypically, are fond of airplanes, ships and trucks, which is why they are more interested in logistics. However, women are well suited to manage complex problems. That is important in our industry too, which, therefore, becomes appealing to women as well. I am happy to see this, because that also generates more interest in our company from women.
Our objective is to have at least 30 percent women in our top team by 2025 – we are now at 23 percent. We made very good progress over the last year. Nevertheless, to get to that objective, you need to hire many more women in leadership positions. I am optimistic that we can make the target.
Q: We understand that DHL is spending millions of Euros for Corporate Social Responsibility? Can you please give us a brief on the current projects?
When it comes to climate change, the logistics industry is part of the problem. We are emitting carbon dioxide through our operations, just like our competitors. We must understand that global warming is a threat to humanity. There are big efforts needed towards making sure the temperature of the planet does not rise.We have seen, just over the last 12 months, the consequences this can have, with the flooding, droughts, and other natural disasters related to global warming. We need to work on this issue, this is our responsibility. That is the reason why we already launched a strategy in 2017 to become carbon-free by 2050. Moreover, in March of this year we even accelerated our ambitions through a new sustainability roadmap, confirming that the Group will invest EUR 7 billion in climate-neutral logistics by 2030. While we have our zero emissions plan for the last five years now, we want to significantly reduce our absolute carbon emissions by 2030. A lot of this is based on the Paris Climate Agreement, where we are trying to meet expectations, based on science-based targets.
The sustainability issues draw our special attention to electric vehicles and green energy. This is part of our commitment; this is not just about throwing money at the problem, but about sending a clear signal to society, to our people, and to our customers, that we are serious in reducing our carbon footprint.Unfortunately, ships and airplanes to a major extent, cannot yet be operated electrically in the near future. Therefore, we need a clear roadmap about how to take this forward – we see that as part of our job.
Q : We are seeing DHL airplanes touching Muscat Airport five days in a week, will we see DHL ships soon?
You will definitely see more DHL airplanes soon, but yet we do not know exactly when.The reason is that we will adjust the number of rotations to the growth of our business. We already took theo pportunities to grow our business and we increased our rotations quite a bit. However, flying seven days a week does not make sense, because we are not picking up enough volume on certain days, so it is better to add conventional airlift when needed.As mentioned before, we cannot generate the volumes ourselves, the country has to create the right conditions, attract investments, establish proper trading and customs procedures and promote education to grow the right talent.This all helps to increase demand and business, leading to higher trading volumes, which allows us tofly more aircraftsinto and out of Oman.
Q: DHL is one of the pioneer organisations in the logistics industry, can we see some DHL logistics training centres in Oman to support the local communities here?
We have multiple programmes in our company to develop our people. We call this suite of programmes ‘Certified’.It is very important that we are all certified specialists for what we are doing, because our industry is quite complex, with specific characteristics in the different logistics areas. If you have a proper school education,a college or university degree, this helps, but we have to build up additional knowledge inside our company. We are working together with some universities in Oman to find the right talent, and then invest to further develop these applicants through our programmes. In addition, we organise internship trainings for university students. We make sure that they enjoy logistics once they walk out of our door to complete their studies, and we have many cases where they have joined back DHL as our employees.
Q: Can you please share DHL’s digitalization initiatives? We often hear from that DHL got the best system and network, does this support DHL to improve on the market share?
When we talk about digitalization, we have to understand what the intention of digitalization is. We believe in the following three objectives. At first,we want to improve the experience of our customers when they are in contact with us –for example during the booking, shipping and tracking processes. Secondly, we make the jobs for our people easier, forexample whenthey communicate with us through mobile apps, or receive news about latest developments. Finally, digitalization helps to improve operational efficiency.
For all of this you need to have a very good IT infrastructure, considerthe latest trends and topics such as Block Chain, Internet of Things, APIs, or Data Analytics, and you have to establish solid IT governance. This is why I am managing the Data Analytics Force of our Group, while the more specific programmes sare developed within our different divisions.Only recently, our German postal business deployed a system, which allows us to track each letter through aQR code. Our Express division introduced a programmw to optimise the flying hours of aircraft. And, in our supply chain business, we deployed many robots to support our employees in automating warehouse operations. Based on a very comprehensive agenda, we will invest EUR 2 billion until 2025, resulting in annual savings of EUR1.5billion from this. We believe that digitalization is the game changer for any industry, including our own.
Q: One more question on digitalization: don’t you lose your talented people while overdoing in digitaliation?
One of the biggest myths about digitalization is that people will lose their jobs. In our company, we will lose about one-third of our current jobs by 2030, but at the same time our Group will be 50 percent bigger, and as a result there will be more jobs than before.These will be different, but better jobs. What we need to do is change our mindset. Therefore, we are looking for colleagues who are willing to change, although that is a challenge, because people usually don’t like too much of a change.
Q: We understand that you have delivered as a courier to your customer for a day. Can you share your experience on this?
I do that on a regular basis – not so often in the last few months, because I don’t want to create additional health and security protocols. What I have always experienced, whether as a courier, or in the warehouse, or in forwarding - all the jobs we do, are very rewarding.If you like to work with people, then working as a courier is a fantastic job. Our job is to connect people and improve their lives, and our frontline employees experience that every day when they are in direct contact with our customers. We are really doing something that makes a difference for others.
Q: How feasible is it for DHL to pursue a green policy, given that most goods are transported by airplanes that consume a lot of fuel?
I believe we will be able to get this problem under control a lot faster than we expect. We have natural resources - a lot of sun, plenty of water, enough wind, and enough carbon dioxide. We can use carbon dioxide, solar energy and water to make sustainable fuels. As a society, mankind has for hundreds of years always found appropriate solutions.
For example, batteries to store energy from wind and solar are a good interim step, but we will need to find other ways. The economy has to become circular. We take water and sun to produce fuel, which when you burn it, splits up into water and carbon dioxide again, allowing you tore-use these elements over and over.I am therefore very optimistic that in mid to long term, most of the fuel we need will be produced by converting power to liquid. Perhaps we will move towards sustainable aviation and natural fuels for trucks, maybe by using hydrogen.It will take some time to scale that up, but I am very confident that humanity will accomplish this.
