DPDHL in efficiencies drive

In an attempt to tackle profitability issues brought about by decline in mail volumes, Deutsche Post DHL Group (DPDHL) has set out plans to improve productivity and yield management.

Group chief executive Frank Appel said: “To deliver long-term sustainable growth, we are now consciously accepting short-term negative effects on our earnings.”

The improvements at DPDHL Group include more automation and digitisation, improving last mile productivity, and intelligent network utilisation. The plan is to use the operational investments to drive higher efficiencies into the network as well as better customer service, with the aim to cost efficiencies of €150 – €200 million a year.

DPDHL is also offering early retirement to civil servants in an attempt to reduce its fixed cost base. €500 million of restructuring costs are planned for this year and into next year. By 2020 this investment should yield cost savings of at least €200 million annually.

It is also looking to improve yields in the postal business while in Parcel Germany, the group will focus on a balance between growth and yield.

The group is now forecasting a 2018 EBIT of some €3.2 billion.

“The PeP division is likely to contribute at around €0.6 billion to this figure while the DHL divisions are still expected to reach around € 3.0 billion. Corporate functions result is expected to be at – €0.42 billion.

The aim is to reach a group EBIT of €5 billion in 2020.