Distribution channels are a set of intermediaries which are a part of manufacturing a product and making it available in the market for the use. These distribution channels are more efficient in manufacturing the products and making them available in the market. The intermediaries which nothing but the interdependent organizations helps in improving the contacts, specialization, experience and scale of operation. Coming to the point of Logistics, it involves the entire supply chain. Now-a-days, the importance of logistics is increasing which is the important aspect in winning the customers and keeping them. It ensures the availability of goods or services with respect to their place which are in good condition and making them available at economical price. Logistics concept is used even before Christ and by many Greek invaders like Alexander the Great and Leon Wise which helped them in describing the methods for finding food, clothing and ammunition. Logistics used to play an important role in the wars by many kingdoms and their generals and they won who practiced the logistics concept. Even in World War II, due to the perfect practice of logistics, it was recognized as the important factor for winning the war.
In the year 1994, according to the survey conducted by Boeing Company, the international express industry occupied a total share of 5% in international air cargo market. This share of the air cargo market gradually continued to increase to 31% by the year 2014 and this largest share belongs to no.1 international express carrier DHL. The foundation stone is laid in the year 1969 by Adrian Dalsey, Larry Hillblom and Robert Lynn (founders initials termed as company name) which later remained as undoubtedly world leader in the industry of air express distribution. The main success secret of DHL is understanding the need of the customers, both international and local and this made the company to launch in 223 countries. By the end of the year 1960, the companies mainly relied on three sources of transportation for transporting the documents and parcels. They used the Post office or equivalent service which mainly targeted the private users, they relied on on-board couriers but are subjected to weight limit and they also used the standard air freight which mainly used to have the delay at the customs department.
These three alternatives formed a big gap in the market for fast, cheap and reliable distribution of goods and services and this led to the foundation of the company. In the initial days, DHL concentrated on emergency document delivery. Later on, after a tight stand in the industry, they started to distribute all the consignments which consisted of all sizes. In the year 1970, most of the banking organizations and many financial institutions started to use the service to reach their targets. This later on spread to other sectors like manufacturing and service, world trading and many other multinational companies. In the beginning of 1982, the use of air express industry was half a billion dollars and which later reached to $4.5 billion by the end of the decade. Due to the increase in the demand, air express companies started to supplement their own fleet of aircraft and their own deports for sorting which helped them in gaining the faith of the customers. In the year 1980, DHL international Ltd., created a hub in Heathrow Airport and it is followed by East Midlands Airport and now this is the third largest air cargo airport. In the year 1981, DHL completely computerized with the significant investment which in return foreshadowed the beginning of total logistic services.
There are many factors that influenced the air express industry and they are
- Due to the change in the manufacturing process and trade globalization, it shortened the customer expectations. Especially in Europe, due to the beginning of developing markets and trade conditions relaxations increased the standard of services reliability.
- To sustain the competition and to withstand in the market, efficiency in distribution is regarded as the important factor. Besides the express delivery service, DHL played an important role in fulfilling the needs of the customer through inventory management, mailroom management services and direct distribution services.
- Technology played an important role in improving the reliability of the company which made a large scale investment on the air express industry. Due to the advancement in the technology, it allowed many multinational companies to depend on a single company who can fulfill their needs. Due to the improvement in technology, it became easier to administrate, reduce the errors and cut down the related costs.
- Due to the change in shipping trends, it lead to increase in the usage of heavier parcel weights in the air express industry.
Brussels super hub is regarded as the DHL’s gateway to Europe and is biggest advanced in Europe. Its size got doubled in the year 1993 after acquiring the Federal Express sorting center. The super hub capacity at present is 80,000 packages per hour with 100,000 employees working round the clock handling over 400 tons.
DHL expanded the company in West Europe as well, in Dublin, Copenhagen and in joining hands with Lufthansa DHL shifted to new cargo center built in Frankfurt. The urgent parcels collected at 4.45 am, arrives in Frankfurt and delivered by the same business day. DHL is the first company to acquire the East European market. In the year 1995, an international express hub is established at John F Kennedy airport to transfer the shipments between North America, Europe, Africa and Middle East.
The important core products in DHL international express industry are DOX Worldwide Document Express, WPX Worldwide parcel express, EUX European Union Express, World Mail and Import Express. Besides these core products there are some other complimentary services like customer automation, insurance services, help desks, weekend collection and deliveries. To improve the quality of service, DHL invested heavily in Information Technology. For example, to track a deliver the customer needs to provide his 10 digit tracking number and country of origin which in return gives the details of date and time of the delivery also with the name of the recipient.
References:
Click to access CourieL_WP2_Chapter2_final.pdf
http://businesscasestudies.co.uk/dhl/the-number-1-express-carrier/just-in-time.html#axzz3auTd6tUW
http://www.dhl.com.au/en/about_us/dhl_in_australia.html
By
Arun Teja Mattaparti (213347061)
Subramanyam Raju Gangaraju (213340871)
Marketing Management Blog T1 2015 
Very interesting post & lots of detail. I think the other advantage with technological advances is that you can now track your item/parcel through the whole process, which some people no doubt love to be able to do. Reminds me of the video clip of Amazon.com that Ho posted last week. It’s mind bogling that so much stuff moves through such a massive centre on a continuous basis. I guess technology makes it easier to keep track of everything, but as always, what happens when your computers crash? Years ago the only way you could buy offshore was to go there & get it yourself or ask someone who lived there to send it to you. Consumers know more, want more & want it asap.
LikeLiked by 3 people
Good post
DHL combined with air and ground modes of transport in order to achieve optimal delivery efficiency, this makes our services around the world every corner, on the other hand, it will fully understand the local market and customer needs.
In the logistics area, DHL globalization is creating a more complex supply chain than before, this is an important competitive advantage. They both offer a wide rang of standardized services, but also provide customized solution for the industry. In my opinion, I believe that this is the only way to achieve the high standards of their customers around the world claims.
LikeLiked by 1 person
Thanks for sharing some background information on DHL and composing a good blog. There is no doubt about the success of DHL.
In an industry that grows almost twice as fast as the global economy, In order maintain a good distribution service, they will have to avoid empty runs, to design schedules as efficiently as possible and to minimize transshipping frequency and times as well as personnel costs and damage to goods. All operational planning must be optimized and administrative costs cut as much as possible.
The secret ingredient in the recipe is to view things from the customers point of view and providing and/or improving the service to meet those expectations.
LikeLiked by 1 person
Very interesting post!
I want to share an article with you. Last year, DHL has become the first to use drones to make deliveries. Thanks to technological advancement, DHL’s drone takes a fully automated route by flying under 50 meters to avoid entering regulated air traffic corridors. And to secure the goods during transport, DHL Parcel developed a special air-transport container that is extremely lightweight as well as weather and waterproof. DHL parcelcopter is already one of the safest and most reliable flight systems. However, fully autonomous vehicles such as the parcelcopter are not legal to fly in many countries such as the UK, and urban and suburban environments are complex, possibility of vandalism or theft is also likely to increase once they land. I think this is a good step in improving its distribution system in a more efficient way.
LikeLiked by 5 people
Good post! Distribution channel is very important nowadays as many people buying stuff through internet. With distribution channel service, the customer can get whatever stuff they want from anywhere. And the customer also can track the stuff after they ordering. The logistic system and the local hub ideas play an important role in the logistic industry.
LikeLike
good, detailed post. It seems DHL have achieved a competitive edge in most countries where it operates. In Canada at least, this seems to have been achieved by offering a niche service. In some remote areas, DHL is the only option for shipping. With internet shopping so popular in these areas DHL seems to have this market captured. I imagine achieving efficiency over such large distances is logistically challenging, however they seem to have a solid performance record.
LikeLiked by 1 person
Thank-you for your post. The history you shared is interesting about the efficiency gains and the incorporation of multiple transportation modes. I think for a logistics company to provide the value and service that customers require, multiple modes are necessary, as DHL has evidently discovered.
Just this month my workplace needed some critical mechanical components to continue operating efficiently. These components totaled over a tonne in weight and would have taken 6-8weeks to arrive by sea from Asia. The logistics company was able to offer air freight which cut down the delivery time to just 1 week (adding $8600 in cost). The tracking service was also very useful in our planning.
LikeLike
Excellent post! Many factors could be able to influence the express industry.However, DHL does successful with a good reputation. For my own experience, during the period when I was in Beijing, China, I always use DHL to express necessary files to LA,USA. This is because it save time and I can track the where is it. Besides, the part what you have posted about There are many factors that influenced the air express industry and they are, is pretty good!
LikeLike
Thank you for sharing. I totally agree that Distribution channel plays a big row in trading system since customers can purchase products online and being able to track down their stuff. However, I personally afraid of shopping online because stuff damaged and lose are needed to be considered. Despite of parcel insurance provided , it can not heal customer’s feeling anyway.
LikeLike
I had no idea that DHL was so successful in Europe….very interesting post. Distribution channels have had to up the ante because of the nature of online shopping and e-commerce. Consumers want their goods delivered as soon as possible, so the online tracking and fast delivery ensure that DHL (along with other logistics companies) provide an efficient service to the consumer. DHL also help businesses set up marketing campaigns to incorporate online shopping and e-commerce solutions. A very clever way for DHL to not only provide a marketing strategy, but also play a big part of the solution!
LikeLike
Good blog. From the initial consultancy and design, to final mile delivery and reverse logistics, DHL provide customized supply chain solutions across all industry sectors. Technology provides DHL more opportunities to meet customers requirements; quick delivery, information tracking, and problem solving and feedback linked customers to a closer place. A small suggestion to blogger, since expresses are related closely to our daily live, more and more people buying things on internet, some comparisons between other express delivery company like EMS or Fedex, from level of price, delivery time, and service quality.
LikeLiked by 1 person
Good post. At first, the blog tell us logistics is an important part of supply chain and use the war in history to certify it.
Then, it is clearly shows the distrbution channel of DHL. DHL is real a very successful logistics company. And it shows that how technology change our life. Knowadays, people can easily purchase the goods, which is far away from customes, and quickly get them by air express industry.
An advice, maybe show how fast the DHL can send a package can more intuitive exposit your viewpoint.
LikeLike
DHL Supply Chain is the world’s largest contract logistics company, and one of the more advanced in providing lead logistics provider (LLP) services, particularly for the automotive sector. in my opinions, DHL is not only uses a uses transport in order to achieve optimal delivery efficiently and effectively, but also uses a technical system to help customer’s tracking the goods as conveniently as possible. The distribution channels helps DHL work more efficiently. The technical system helps them to serve customers as attends. That’s why DHL is successful.
LikeLike
Sorry:
As friends;););) not attends
LikeLike
Thank you for sharing this interesting blog! Obviously DHL is a successful company in Europe. The role of DHL is Logistics in function of a channel. DHL’s job is doing coordinate flow of products throughout channel. By using their excellent market strategy, successful promotion method help them set up a great brand image. At the same time high quality work in ground or air establish their advantages. A large number of customer wish receive their goods as fast as sellers can, DHL helps manufacture and customer solve this time issue, and make whole purchase process more fast and efficiency. DHL make whole process more effective and efficient. I think that’s the reason why DHL so successful.
LikeLike
I agree! DHL positioning a very excellent strategy, distribution and chain. Most of users are sacrificed with their services by these effective measures. Besides, these excellent ideas are also helpful to them gain a very good reputation. Their after-sale services are also good. They make the chain completely. Therefore, DHL is successful.
LikeLike
Thank you for the post. In my mind, I always treat DHL as a courier express company. However, interestingly to know that DHL Supply Chain provides customers in many industry sectors with logistics services along the entire supply chain – from planning, sourcing, production, storage and delivery to returns logistics and value-added services.
LikeLike
Good Blog
DHL plus air and ground modes of transport in order to achieve optimal delivery efficiency, which make our services in every corner of the world around , on the other hand , it will fully understand the local market and customer needs .
In the field of logistics , DHL globalization is creating a more complex supply chain than before, which is an important competitive advantage. They offer a wide range of standardized services rang , but also for the industry to provide customized solutions . In my opinion , I think this is the only way to achieve the high standards required of customers around the world .
LikeLike
Excellent views!
DHL uses many different tools to transport goods in order to delivery. It seems that using air mode causes more cost. However, DHL could be able to get more profit in the future. This is because that more and more consumers prefer to DHL as its fast. In addition, correctly positioning makes DHL has its unique advantage.
LikeLike
This is a good topic. I used to use a lot of courier services before however DHL service is really impressive. After having problems in some other courier service, one of my friend introduced me the DHL delivery service. Another plus for word of mouth marketing strategy when DHL offers a quite perfect service with local pick up method with time arrangement. With inflexible work schedules, I hardly get time to wait for an item or go post it. Therefore personally the special services of DHL make me feel really happy and confident. Image of DHL also likely to appear on the popularity of large truck and billboard with yellow logo which gives customers a reliable picture. Furthermore, diversity in choosing the shipping channel will fully meet the needs of many different customers. Furthermore, with the application of technology in providing customers with the ability to check the delivered process which is a factor to help improve customer trust for Services.
LikeLike
Thanks for the blog. I believe that one of the success factors of DHL is understanding its customers. Also the service they provided is very impressive. Besides the speed of them processing and delivering customer orders, they also update the status of the parcels very quickly. I think it is very important as customers would love to know where their parcels are, and when they will receive them. The tracking information from DHL updates immediately after each working process and the estimated delivery is very accurate, unlike some other couriers. I believe this is why people always choose DHL to send their stuff.
LikeLike
International express industry is very important for nowadays economy; organizations need to import and export thing to run their business. DHL is a successful express delivery company; DHL totally understand the needs of customers; they can fulfill the satisfaction of both international and local customers. DHL used both air and ground transport to do the delivery on time; they tried hard to deliver goods for customers as fast as possible. DHL organize the schedules with good management; the aim is to maximize the efficiency of the shipping but they need to minimize the cost as well.
Also, they provide the delivery number for your package, you can check the location of you package from their website, this can avoid the loss of the package and let the customers to feel relieved.
I always purchase things online and I always selected DHL for the delivery method. Although this is the most expensive method, that is the fastest delivery method. If I am the customers, I would like to receive the things as soon as possible.
Thank you for your sharing.
LikeLiked by 1 person
as the intermediaries, DHL can not only improve efficiency of distribution channel, but also reduce the cost of distribution by making transactions routine. this is really needed by personal customers and small or medium-sized enterprises.
LikeLike
I love the layout of this blog, it reads beautifully and summarises/articulates the points in a really clear fashion.
The one thing i was curious about is the known issues of DHL’s parents pushing aggressive revenue and profit targets forcing the companies to restructure efficient and effective modelling to meet the demands. There is lots of good information of how it has worked for them in the past and built the company to what it is today, but do you think there are risks of leaning on well established and functional supply chain and distribution environments.
You also talk about heavy leveraging of the digital age but is there any risks that a company such a DHL have to manage as to not be effected by a totally digitised system.
LikeLike
Great blog! Companies such as DHL are extremely important nowadays due to the number of online shopping due to this tech savvy generation. Now individuals are becoming more aware of courier companies and wanting them to act faster and faster. In fact, Melbourne Airport is expanding in order to make it easier for courier companies to directly collect large shipments which have come in. They are planning to have a segregated runway with large warehouses to compile shipments much faster and with less interference from general flight traffic. DHL can benefit from processes such as the Melbourne Airport renovation in order to deliver to their customers faster.
LikeLiked by 1 person
nice blog and i agree with you that distribution channel is one of the important process and plays an important role in trading these days as people do a lot of online shopping these days and the you can also track your order that it is being shipped or not.i personally love shopping online as you can shop from anywhere you want around the world and your order will reach you within a week.
LikeLike
Thanks for the blog. DHL example shows all successful companies have successful supply chain model.
LikeLike
An extremely interesting post…….. Nonetheless, distribution networks has always gained the attention of marketers and with an increase in online shopping, a strong distribution network emerges as a source of competitive advantage for the firms. DHL has realized the importance of the same and proactively used technological advances in its favor. It has started the express service which delineates it from its competitors. Also, a precise eye on the customer service is also a potent source of advantage for the organization. The company realizing the crux of distribution is efficiency has focused on the precision of its operations and gained an edge over its competitors.
LikeLike
Thanks for sharing information of DHL, the express industry as a new fast growing industry has unlimited potential of this new development mode of transport to the courier industry has brought a new approach, but this new approach there are still many problems to be solved. As an international express delivery, transportation costs, weather conditions, are required within the scope of consideration. Therefore, DHL need to improve transport routes, to ensure transportation safety of goods
LikeLike
DHL have a range of products that cater for a number of purposes. Companies like DHL and Fed Ex have definitely assisted the B2B and C2C market, where important documents or items can be placed in their care for delivery.
They were able to build an efficient distribution network, which over time gained consumer trust and a strong brand reputation. I am not too sure if they offer cots effective solutions but as there are not many trustworthy courier services, they operate in an oligopolistic market, I feel consumers have no choice.
However it is duly noted that DHL have effectively designed and implemented a logistics network, in consideration of the vast distribution locations and timeliness of their deliveries that can overcome trade, geographical and climate barriers.
LikeLike
The means in which we ship goods as was discussed in the blog above is vital in ensuring respective goods are received by the end point consumer. However one element that is need of discussion is around the way in which items are packaged to assist in the delivery of the good. For example, IKEA re defined the furniture shipping business by designing the ‘flat pack; whereby many items of furniture can be delivered at once at a lower cost (size and weight elements). So not only do we need to look at ‘how fast’ an item is delieverd we must look to how a product is protected in transition and at what cost (re weight etc)
LikeLike