This week marks the opening of DPD’s new hub, billed as the largest and most modern in Europe. Its opening is a testament to the success of DPD in achieving market-leading service levels and, hence, growth rates, in recent years.

Headline metrics which will be widely quoted is the speed at which the new hub can sort parcels and the number that it can sort in an hour. While these are impressive, our experience is that this is less important in achieving cost leadership than managing the smaller, and sometimes more manual processes in the hub. Fortunately for DPD, that area is also a strength.

As the recent UK Mail hub opening showed, there can be an element of risk in bringing on stream a major new facility. In that case, UK Mail appeared to be caught out by the level of ugly freight in its network. While this is disappointing we were not as surprised as many observers.

This is because we have seen in our work with other parcels networks that some have been aware of the importance of the level of ugly freight as a profit driver, but not had a way of tracking what the level actually was – either by customer or in aggregate. However, given its focus on smaller parcels, and the qaulity of its information systems, it would be more of a surprise if DPD were to be similarly caught out.