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DP DHL to invest $2B in digital transformation


Bonn, GermanyDeutsche Post DHL Group announced its new Group Strategy. With “Strategy 2025 — Delivering excellence in a digital world” the Group is laying the foundation to continue its successful growth trajectory beyond the horizon defined by its previous “Strategy 2020”. The company says it will be focusing even more consistently on harnessing the sustained potential for profitable long-term growth contained in its core logistics businesses. Furthermore, it will be stepping up the digital transformation of the Group that is already underway in all business divisions. Till 2025, the Group will be spending around EUR 2 billion on digitalization — this sum is already included in the planned Opex and Capex spending. The digitalization investment is expected to lead to yearly run rate benefits of at least EUR 1.5 billion by 2025.

“Deutsche Post DHL Group has never been in better shape. We are convinced that future growth will come from a consistent focus on our profitable core logistics businesses – and digitalization will become the greatest lever,” said Frank Appel, CEO of Deutsche Post DHL Group, during the presentation of “Strategy 2025” in Frankfurt am Main. “We need not reinvent ourselves. We will digitalize ourselves.”

“Strategy 2025”: Focus on profitable core and leveraging digitalization 

The Group has confirmed four trends that have been impacting logistics in recent years, which will continue to do so in the future: Globalization, E-Commerce, Digitalization and Sustainability. “Strategy 2025” is the Group’s answer to these and the next logical step from the previous strategy.

Given that the Group is made up of a strategically diversified logistics portfolio, each of the five divisions — Post & Parcel Germany (P&P), Express, Global Forwarding, Freight (DGFF), Supply Chain and eCommerce Solutions — has set its own path based on the individual profitable core. Combined with the specific divisional growth drivers this forms the basis for clear strategic prioritization in the divisions. A relentless focus on execution will allow each of the divisions to achieve market leading margins in their segment.

One of the main drivers for growth within each core will continue to be e-commerce. The divisions benefit from dynamic growth opportunities for their solutions along the entire logistics value chain, from inbound logistics to fulfillment, delivery and returns. “We are the only company that is able to offer single elements as well as the entire e-commerce supply chain on a global scale. This is our key differentiator”, Appel said.

In addition to focusing on the profitable core, Deutsche Post DHL Group sees systematic digitalization throughout its businesses as a lever for achieving significant progress. The pace of the digital transformation that has already been triggered within the Group will be stepped up. Until 2025, the Group will be spending roughly EUR 2 billion on initiatives which are designed to enhance customer and employee experience as well as improve operational excellence.

Deutsche Post DHL Group will be comprehensively modernizing its IT systems, integrating new technologies, offering its employees targeted advanced training to enable them to use these technologies and, thus, steadily improving its services, processes and standards between now and 2025. Efficiency will be improved by greater automation and improved transaction processes, for example through warehouse automation and robotics programs. Data Analytics will be widely applied for example to foster routing optimization through advanced algorithms, operational volume prediction and with this optimized resource planning.  “Moving forward, we will bundle our technological capabilities as a Group in global Centers of Excellence. Here we will centrally develop key technologies like Internet of Things, IoT, and then provide them to our divisions. This way we can leverage the strength of our Group to push forward our digitalization”, Appel said.

 


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