Eastern European history of the world's foremost courier companies
Since the collapse of communism a growing number of Western organisations started to trade with Central and Eastern European countries both to develop new markets and help develop the economy in this part of the world where trade barriers must remain in place, telecommunications facilities are at their most basic, state transport is too irregular to be reliable and the bureaucratic maze is enough to drive a business person to distraction, but try telling that to DHL, a company which has taken the bull by the horns and has established a substantial presence in the region and, importantly, is mapping out plans for future growth. DHL has become an indispensable partner for many businesses to ensure the swift and reliable delivery of consignments in and out of the region. We take a look at the way in which the DHL Worldwide Express international network has spread through Central and Eastern Europe, successfully integrating with local business and communities.
DHL's foresightEastern and Central Europe was a very different place in 1983 from what it is today. Stores weren't teeming with American and Western European products and foreign investment was minimal. There were also no Express delivery services.
DHL, true to its pioneering spirit which founded the express industry in 1969, set out to change that. It recognised the incredible potential the Region had and sensed future changes and an increase in foreign investment.
DHL, led by the strength of its international network, entered the Eastern and Central European market in 1983 with the opening of offices in the former Yugoslavia. This move made DHL the first express distribution company to establish operations in the region and the following year it opened offices in Hungary, Poland, Bulgaria and the CIS. By 1986 the remaining countries had also established a service.
Business in the early days was different too. Due to the shortage of available office space, offices were often started from apartments or houses converted into DHL offices. In those early days legislation also only allowed DHL to operate via government-appointed agents or through joint ventures. This soon changed with the fall of communism and as the law allowed, DHL quickly established 100 per cent wholly owned subsidiaries throughout the region.
Today, DHL has grown to 160 offices and over 3,000 staff throughout Eastern and Central Europe. In the CIS alone, DHL has 37 offices and serves more cities than any other transportation company (200).
DHL focuses on integrating itself in the business as well as the local community with 85 per cent of DHL's business customers being local companies. Principal clients include high-tech companies, banks, consultancies, agencies, law firms, shipping companies and heavy industries such as automotive chemicals, coal, steel, textiles, oil and gas.
Investing in Central and Eastern Europe"Our network is only as good as our weakest link," said Peter Davies, Regional Director for Central and Eastern Europe. Therefore we have never accepted that we would have to provide any less from our service in Central and Eastern Europe. We expect and strive for our businesses in those countries to provide high quality service comparable to anywhere else in the DHL network.
This philosophy prompted DHL to invest close to 100 million USD into the Region since 1989. Half of that has gone into developing premises and a proper working infrastructure with the remainder invested in aircraft, vehicles, staff training and state-of-the-art computer technology.
TechnologyEffective data and voice communication is more difficult to achieve in Central and Eastern Europe because of the unsophisticated state of many internal telecommunications networks. However, DHL is making progress by linking up all its offices in the region via a combination of leased lines, satellite links and dial-up facilities.
DHL has been heavily investing into its airport facilities where shipments are handled and sorted for their destinations. Many such premises known as 'gateways' have been opened throughout the region. Most recently in 1996 new gateways were opened in Bratislava, Zagreb and Katowice. The gateway in Katowice marks the second purpose-built gateway to open in Poland and by saving time, allows businesses in southern Poland to compete more effectively with their counterparts in Western Europe.
DHL continues to work closely with Customs to ensure trade in the region flourishes and has established in-house DHL dedicated Customs agents throughout the region.
Inconsistent and confusing 'impromptu' Customs laws often make it rather challenging to get the millions of shipments DHL handle annually through Customs. However, DHL and Customs are working together to overcome these difficulties and obtain the fastest clearance possible.
DHL is proving it aims to deliver the same quality of service in Eastern and Central Europe that it does globally. Last year, Slovakia became the first country in the region to receive ISO 9002 accreditation. The CIS was also recently awarded the ISO 9002 and the rest of the region are working towards accreditation later this year and in early 1998.
DHL already uses its own flights connecting most of the countries with its international network. This is being expanded extensively over the next two years.
Supporting the local community - a strategy of commitmentDHL sees every country in Central and Eastern Europe as having equal potential for growth and places high importance in developing its people, investing seven per cent of its revenue in staff training.
"Throughout Central Europe we give key priority to recruiting young people who have little experience in business but are intelligent and enthusiastic. We then develop them in house and constantly send them on training courses in Western Europe," said Peter Davies. "We have over 3,000 employees - 99 per cent of whom are locals. Senior management teams including General Managers are mostly made up of local people."
DHL is one of the most progressive employers from the West in Central and Eastern Europe, employing indigenous people from the local area and investing in state-of-the-art infrastructure and technology as well as producing a high level of business training.
DHL also supports local initiatives in the communities and has been one of the founder sponsors of initiatives like the Prince of Wales Business Leaders Forum as well as providing monetary and skills support for regeneration projects across Central and Eastern Europe.
"Clearly, Central and Eastern Europe needs international trade to facilitate the development of the business economy," said Peter Davies. For this to be possible, the region needs fast and reliable communications and distribution services. Cultural empathy and real understanding of the differences between countries are other prerequisites for success in the region, alongside an uncompromising focus on quality."
"As we have raised our customers' expectations of service in the region, this has brought increasing challenges for our people, and our ability to meet these challenges and to improve is the key to our success in the region.
DHL had invested in Central and Eastern Europe long before the recent interest by many Western firms and has steadily expanded its presence in the region as part of its global strategy. As a result, the company actively facilitates international trade in the region and plays a vital role in the Central and Eastern European business community and economy.