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.
Arun Teja Mattaparti (213347061)
Subramanyam Raju Gangaraju (213340871)