Present and Future free essay sample

DHL: Past, Present, and Future Abstract This paper presents a brief history of DHL, its formation in 1969, and its rapid growth in the international courier market. The paper then looks at the history of couriers, express and parcel delivery services, the current status of the company, and future opportunities and challenges for the industry and the company. DHL: Past, Present, and Future This paper will explain to the reader the courier, express, and parcel delivery service industry with a brief history of how these industries work. After explaining these industries, this piece will go into the history of the global market leader in logistics, DHL. After concluding the brief history of DHL, the majority of this paper will describe DHL’s Express division, the current status of the industry and company, macroeconomic indicators that relate to DHL, and future opportunities and challenges for the industry and the company. Courier services have been around for ages. The word itself is taken from the Spanish word correr, which means to run. A courier can be defined as a messenger, especially one on official diplomatic business. Wikipedia’s Courier article stated the following: A courier is a person or a company employed to deliver messages, packages and mail. Couriers are distinguished from ordinary mail services by features such as speed, security, tracking, signature, specialization and individualization of services, and committed delivery times, which are optional for most everyday mail services. As a premium service, couriers are usually more expensive than usual mail services, and their use is typically restricted to packages where one or more of these features are considered important enough to warrant the cost. The company specialized in shipping gold, packages and newspapers throughout the West, making a Wells Fargo office in every camp and settlement a necessity for commerce and connections to home. Shortly afterward, the Pony Express was established to move packages more quickly than the traditional method, which followed the stagecoach routes. It also illustrated the demand for timely deliveries across the nation, a concept that continued to evolve with the railroads, automobiles and interstate highways and which has emerged into today’s courier industry. (â€Å"Courier†) Now that the history of couriers has been conveyed to the reader, package delivery will need to be explained. Package delivery is conducted by a courier or expresses service, and is the single sole purpose of an Express service. Wikipedia states the following about package delivery in the United States: Motor freight services arose quickly with the advent of gasoline and diesel powered trucks. United Parcel Service had its origins in this era, initially as a private courier service. The general improvement of the highway system following World War II prompted its expansion into a nationwide service, and other similar services arose. At the same time the contraction or rail passenger service hurt rail-based package shipping; these contractions led to the cancellation of the mail contracts with the railroads, which in turn caused further passenger cuts. Eventually REA was dissolved in bankruptcy in 1975. Air mail was conceived of early, and scheduled service began in 1918. Scheduled airlines carried high valued and perishable goods from early on. The most important advance, however, came with the â€Å"hub and spoke† system pioneered by Federal Express (now known as FedEx) in 1973. With deregulation in 1977, they were able to establish an ir-based system capable of delivering small packages—including mail—overnight throughout most of the county. In response the postal service initiated a comparable Express Mail service. Ironically, in the same period they also began contracting with Amtrak to carry mail by rail. Thus at the beginning of the 21st century, the US consumer can choose from a varie ty of public and private services offering deliveries at various combinations of speed and cost. The history and meaning of Express service itself, encompasses both the histories of couriers and package delivery. DHL is the largest provider of international logistics and operates under four specialized divisions of Express, Global Forwarding, Freight, Supply Chain, and Mail. DHL started with just three men named Adrian Dalsey, Larry Hillblom, and Robert Lynn. Fortuna’s blog depicts the history of DHL as: Founding DHL Worldwide Express is an international express mail service. As a main competitor with FedEx and UPS, DHL vies for much of the shipping needs of businesses and individual around the world. What started with humble beginnings soon became a several billion dollar international enterprise. The company was founded in 1969 to provide express delivery services between the contiguous United States and Hawaii. The three young founders were Larry Hillbloom, a University of California at Berkeley graduate, Adrian Dalsey and Robert Lynn, all based out of San Francisco, California. Initially their shipping company offered the delivery of shipping document by express air delivery. These shipments, made in advance of bulk shipping needs, allowed ships to be unloaded more quickly once they arrived in the following days. Early Success From its early service shipping logistically from San Francisco to Honolulu, the company gradually expanded to encompass the Americas, and then much of Asia and the Pacific Rim in 1971, followed by the rest of the Western Hemisphere, Europe and the rest of the world. DHL services were first introduced in the vital markets of Hong Kong and Japan in 1974. That same year they opened their first UK office in London, expanding their company from three employees in 1969 to 314 five years later with over 3,000 customers. Ever adapting to meet the needs of the world marketplace and keep up with growing competition, DHL continually altered its methods, soon becoming a full delivery program. Co-owner Adrian Dalsey owned a share of the company until 1980, when he traveled Hawaii, Micronesia, Guam and other parts of Asia selling his shares and interest in DHL. 1980s to Present In 1983, DHL became the first air forwarder to serve the Eastern European countries and opened an international hub in Cincinnati, Ohio, the same year. By 1985, they opened a deluxe center in Brussels that handled over 150,00 orders every night. They expanded further with major post openings in Bahrain in 1993 and Kuala Lumpur in 1998. In 1999 Deutsch Post, the world’s largest logistical company, began to acquire shares and stocks in the company and in 2001 bought enough to acquire majority ownership. By the end of 2002, they would achieve full ownership of the company. As of 2009, DHL employed 300,000 people around the world in over 220 territories and countries. Since the company’s founding, their services have expanded to encompass air, overland, freight and sea shipping, and they remain the top logistical delivery company internationally. Also in early 2009, DHL discontinued its domestic-only Express service. The company changed its Express business model to focus only on its international shipping to reduce costs. DHL purchased Airborne Express in 2003 to compete with FedEx and UPS, but later found out how much of a stranglehold the two companies had on domestic-only services. After announcing the discontinuation of domestic-only services, DHL closed its ground hubs and cut the number of stations it had by 75%. Currently, DHL is starting to rebound from its U. S. quagmire and current global economic recession. After DHL reduced U. S. operating costs by over 80%, it finds itself looking forward to 2010 and beyond. According to DHL’s 2010 Press Release: Deutsche Post DHL concluded the first quarter of fiscal year 2010 with an increase in revenues and a strong rise in earnings. Buoyed by the continuing recovery and the world economy and rising transport volumes, consolidated revenue climbed 4. 4 percent to EUR 12. 0 billion compared with the same period last year. These solid results were fueled by substantial growth in DHL, a development that was also driven by increasing business with important new customers.