Amazon’s Transport Ambitions Could Hurt DHL

Should the online retailer take delivery services in its own hands its main logistics partner Deutsche Post-DHL might lose a lot of its parcel business. DP boss Frank Appel spoke of a “challenge that spurs our sporting ambitions.”

 Still partners. But how about tomorrow?  -  Courtesy Reuters
Still partners. But how about tomorrow? - Courtesy Reuters

Amazon is keeping the ball low. Asked by German newspaper Handelsblatt about the consequences of setting up its on delivery system, Amazon’s European head of logistics, Roy Perticucci, denied any company strategies to get directly involved in the package delivery business. He rejected any idea to renounce the DHL services, saying “DHL has invested a lot particularly in Germany. We need such partners who go along with us,” Perticucci told Handelsblatt.

Munich might only be the beginning
However, this doesn’t seem to be the entire truth of the matter, shown by Amazon’s Munich engagement where the e-commerce giant started deploying a fleet of 240 vans under its own managerial responsibility, operated by various local sub-contractors. It’s still an experimental model, but it seems to work or else Amazon would have shelved all plans to expand the project.
The consequences have begun to hurt at DHL that seems to have lost up to 30 percent of its market share in the Munich region, local observers say. More trouble seems to be on the horizon since Munich might only be Amazon’s starting point to take over full responsibility for last mile delivery.
Should this be the case, DP-DHL might lose half of its market share in Germany. A bleak outlook for Appel and his team as shown by the figures:

Playing hard ball
Currently, almost 1 in 7 of the 1.15 billion parcels delivered to German households each year were dispatched from Amazon, most of them delivered by DHL.
Handelsblatt emphasizes that DP-DHL should be alarmed by Amazon’s delivery activities in the UK, where local Royal Mail had to halve its growth forecast as a consequence.

Air services to come next
It appears, that the U.S. giant is blowing the horns for attack on the ground, by integrating the last mile of delivery into its own service portfolio, simultaneously, however, the online retailer pushes ahead with plans to conquer the sky as well. A clear indication of such doing is their announcement to operate up to twenty freighter aircraft beginning this year to better service their U.S. clients, as Amazon stated.
The good news for Frank Appel and his DP-DHL management is that this might hurt FedEx and UPS on their home turf much more than DHL Express.

Heiner Siegmund

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