Coming out the other side of the Global Financial Crisis (GFC), everyone’s business looked a little different, and DHL’s was no exception. Where in 2007 the wellspring of its business was express delivery courier and international shipping services between businesses, recently growth has been coming from a combination of both the consumer market and the traditional business-to-business market. So much so the company has had to add a new bi-weekly flight from the United States. Trade Express spoke to Phil Corcoran, DHL’s vice-president of sales for Oceania, about why the flight has been added, and how it represents a fundamental economic shift happening in Australia.
TE: The world’s economic situation has remained shaky since the worst days of the GFC, so why has DHL decided to start a new bi-weekly flight from the United States?
A: The US has always been a major trading partner, but it’s now our second largest after China. Twelve-and-a-half per cent of imports into Australia come from the US, and it’s our fastest growing trading partner now. Australia is now DHL’s number one outbound destination for flights out of the US and it’s because of the big boom in online retail. And it’s not dying away. The strong Aussie dollar has helped as well.
TE: Is this a recent phenomenon?
A: Parcels delivery between the United States and Australia started to noticeably pick up around 2010. We noticed a change to our business around then. Traditionally our business was business-to-business. As we’ve emerged from the GFC we have seen incremental growth in that, but we’ve also seen a real rise since 2010 of the online retail business.
TE: Tell us a bit about the new flight?
A: A dedicated Boeing 747 freighter aircraft with a payload of up to 113 tonnes will start a round trip between Australia and DHL’s North American hub in Cincinnati. It will come twice a week, on Thursdays and Sundays, and will give us a one-day advantage on flights into Melbourne and Brisbane. The plane flies from our hub in Cincinnati to Hawaii, then Sydney, Melbourne, Hong Kong, Anchorage (Alaska) and back down to Cincinnati.
TE: What are the advantages for Australian consumers?
A: Advantages for the consumer are the transit time advantage for Brisbane and Melbourne. There are certain times of the year it’s hard to get flight space from the US, so this will insulate us and it allows for growth.
TE: You said earlier the strong dollar has helped imports—but we’ve seen that fluctuate over the last couple of months. Has that had an effect on your volumes?
A: We didn’t see any impact in the flow of volume as the currency fluctuated over the last couple of months. It’s a trend that’s taken a while to emerge, but mainly in the last couple of years, people have had the confidence to shop online, and had products that allow them to do it. It’s also important to note that this growth isn’t specific to the United States—of the top 10 online retailers globally, 39 per cent of their sales end up in Australia. By contrast, the United States accounts for 12 per cent, and Canada, 11 per cent. Australians have picked up on the advantages of shopping online and at the same time you’ve got a strong currency and enabling technology like smartphones and tablet computers.
TE: How do you see this growth playing out?
A: It’s here to stay. The growth on the lane from the US to Australia is expected to be beyond 20 per cent.