TBY talks to Ken Robertson, Country Manager of DHL Express Kazakhstan, on the country’s developing connectivity and challenges in the logistics sector.
THE BUSINESS YEAR What are some highlights from your operations over the last year?
KEN ROBERTSON DHL is a clear market leader in both international and domestic express deliveries in the Kazakhstani market historically, and over the last year we have continued our growth. We carried out many operations in order to meet customer requirements, and to satisfy customer demand in terms of fast transportation. This includes not only documents, but parcels and heavy shipments within Kazakhstan and internationally. Kazakhstan is the ninth biggest country in the world, and transportation and infrastructure are very important for Kazakhstan’s economy. Moreover, we absolutely support the strategic efforts to utilize all transit opportunities and to turn Kazakhstan into a transit corridor between Asia and Europe, and the north and south of Asia. Apart from this transportation system, for us it’s important to see good growth in comparison with the average growth of the transportation sector in Kazakhstan. Our estimation is that all of Kazakhstan’s modes of transport will grow. In 2011, growth came in at around 14%, while we have also shown double-digit growth. This year is also going well in terms of shipments and revenues.
What trends do you see in terms of Kazakhstan’s connectivity?
What we found in 2011 was that customer demand was pushing us toward faster transit times within the domestic market, and in particular to and from Astana. The traditional way of moving goods to Astana is via Almaty, which serves as a hub. This puts an additional day onto the delivery time. We then performed market tests in terms of transit performance and made adjustments. DHL has now improved transit times across the country to Astana to between one and three days, depending on the origin. For example, in August 2011 we launched a direct air connection between Moscow, Russia, and Astana, Kazakhstan, for all shipments between the two cities. As a result of the new connection, DHL customers can take advantage of unprecedented service levels for their shipping requirements between the two countries. The company can now offer a transit time on the route of just one day for standard express shipments.
How is the Kazakhstani market evolving?
DHL knows that the Kazakhstani market requires a wide range of services and products, beyond just shipping between Almaty and Astana in order to meet all customer requirements. Over the last year, there have been some interesting developments. The Customs Union started to function properly, and we have seen an increasing number of shipments between Kazakhstan and Russia, and Kazakhstan and Belarus. Companies such as DHL Express are really indicators of business activity, and we certainly noticed a jump in the number of shipments and active customers interested in making deliveries throughout the Customs Union. Interestingly, shipments to international destinations such as the US, France, the UK, and China also increased significantly. This is a good indicator of the diversifying nature of Kazakhstan’s economy.
What competition do you see in the market now that there’s heightened demand for deliveries?
The most competitive area is the domestic market as the barriers to entry are very low, and any man and his truck can do a domestic delivery. Probably the most competitive line would be Russia, because this is an area where the majority of volumes are. We are growing very quickly, but we have to differentiate this market from the postal market because our main market is business-to-business next-day delivery.
What are the main challenges for DHL in the logistics sector?
The biggest challenge that we face in the local market is in bringing shipments into the country; specifically, there have been times when we have experienced limited capacity. If you don’t have the capacity, you don’t fulfill your customers’ expectations. Similarly, when you ship to smaller cities by air there is also limited capacity. We are too dependent on local airlines and their success. We depend on them and their capacity, and this is a major challenge.
What innovative solutions are you introducing to enhance your clients’ experience with DHL?
I think from a strategic perspective in 2012, we would like our employees and all of our customers to ask the question: “Why wouldn’t I work with DHL?” It sounds corny, but from a customer service perspective, if you have a large market share and the market diversifies, the risk of losing market share or growth is high. How do you protect that market share? Through the customer experience. If I have a courier and he goes to a customer every day for two or three years, there’s a relationship that’s established. If I have a courier that goes there every two months and leaves DHL, and then another one goes for another two months and so on, there is an increased risk that our customers might leave us. So, customer service and employee satisfaction are probably the most crucial factors in terms of where we are going right now. We introduced some European innovations here in Kazakhstan, which made business easier for customers. We also introduced online solutions for customers in order to make the customer’s own business more accessible and DHL Express services easier to use. We are ready to provide our customers with a preview on the internet with full details to track and trace their shipments. They can select DHL shipping options, which allow them to manage their database, and that makes DHL usage easy.
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© The Business Year - May 2012