DHL Worldwide Express
significantly reduce the turnaround time of ships in port. DHL grew rapidly and, by 1990, serviced189 countries. In 1990, revenues were approximately $2 billion. Profits before taxes were 4%-6% of revenues.
summarizes the growth of DHL operations from 1973 to 1990;
displays DHL’s revenues by industry.)DHL used a hub system to transport shipments around the world. In 1991 the companyoperated 12 hubs (as shown in
). Within Europe, the United States, and the Middle East,DHL generally used owned or leased aircraft to carry its shipments, while on most intercontinentalroutes it used scheduled airlines. In 1991, approximately 65% of DHL shipments were sent viascheduled airlines and 35% via owned or leased aircraft. The other leading shippers also utilizedscheduled airlines but to a lesser extent than DHL. Federal Express relied on its own fleet of planes totransport all its shipments. Pierre Madec, DHL’s operations director, noted:FedEx has a dedicated airfleet which ties up capital and limits the flexibilityof its operation: express packages are forced to wait until the FedEx plane’s takeoff slot, which at major international airports frequently does not tie in with the end-of-the-day courier pickups. By using a variety of scheduled international carriers, DHLis able to optimize its transport network to minimize delivery times.DHL was organized into nine geographic regions. Region managers oversaw the relevantcountry managers and/or DHL agents in their regions and held profit and loss responsibility forperformance within their territories. Revenues and profits were recognized at the location where ashipment originated. Only 70 people worked at DHL’s world headquarters in Brussels. The mainfunctions of the worldwide marketing services group, of which Sarrafzadeh was a member, were business development, information transfer, communication of best practice ideas, and salescoordination among the country operating units.Of DHL’s 60 million shipments in 1990, 50 million were cross-border shipments. DHL’sworldwide mission statement, included in its 1990 annual report, read:DHL will become the acknowledged global leader in the express delivery of documents and packages. Leadership will be achieved by establishing the industrystandards of excellence for quality of service and by maintaining the lowest costposition relative to our service commitment in all markets of the world.DHL management believed that achievement of this mission required the following:
Absolute dedication to understanding and fulfilling DHL’s customers’ needswith the appropriate mix of service, products, and price for each customer.
Ensuring the long-term success of the business through profitable growth andreinvestment of earnings.
An environment that rewards achievement, enthusiasm, and team spirit, andwhich offers each person in DHL superior opportunities for personaldevelopment and growth.
A state-of-the-art worldwide information network for customer billing, tracking,tracing and management information/communications.
Allocation of resources consistent with the recognition that DHL is oneworldwide business.
A professional organization able to maintain local initiative and local decisionmaking while working together within a centrally managed network.