161 ECommerce Cooperation Cross Border E Commerce Logistics
16+1 E-Commerce Cooperation: Cross Border E -Commerce Logistics Cooperation 16+1 E-Commerce Development Conference Under The “Belt and Road” Initiative Carsten Hess, Vice President & Head of Corporate Public Policy AP & EEMEA, Deutsche Post DHL Group Chengdu, China, 4 August 2017
WHO WE ARE – A GLOBAL COMPANY WITH A No. 1 in international express delivery UNIQUE PORTFOLIO Europe’s largest postal service Leader in the forwarding business Partner for e-commerce and a pioneer in secure digital communications No. 1 in contract logistics 2
HOW DHL INVESTS IN “BELT AND ROAD” HERE FOR THE LONG HAUL A TIMELINE OF DHL’S INVESTMENTS IN BELT AND ROAD INFRASTRUCTURE NOVEMBER 2015 DHL opens Maritime Silk Road service between Shanghai and Piraeus, Greece. MARCH 2014 MAY 2013 DHL opens West Corridor between Chengdu and Lodz. AUGUST 2015 DHL forms strategic partnership with the United Transport and Logistics Company, a joint venture between Russian, Kazakhstani and Belarusian railways. OCTOBER 2014 DHL links Japan to the North Corridor via Shanghai. DHL enters strategic partnership with Belarus Railway and Transport Ministry. Like Japan, Taiwan and Korea gain ocean freight links to DHL’s North Corridor. MAY 2016 DHL and Chengdu Gateway Logistics Office sign MOU to upgrade Infrastructure, customs clearance for West Corridor services. DHL signs MOU with Azerbaijan Railways to further develop Baku as a multi-corridor rail hub. 2008 -2011 JANUARY 2014 JUNE 2015 DECEMBER 2015 SEPTEMBER 2016 DHL begins feasibility studies on Asia-Europe multimodal connections. DHL signs first multimodal contract with FELB, a subsidiary of Russian rail firm RZD Logistics. DHL launches first temperature-controlled rail service between China and Europe. DHL adds Zhengzhou-Hamburg route to West Corridor. Southern Corridor between Lianyungang and Istanbul officially opens, leveraging MOU with KTZ Express and partnerships with Central Asian railway operators. DHL links Vietnam to Europe via the West Corridor. SEPTEMBER 2014 DHL opens North Corridor between Suzhou and Warsaw. Rail Ocean Road MOU DHL and Kazakhstan Temir Zholy (KTZ) Express sign MOU to upgrade capabilities, add new service locations to Central Asia. MAY 2017 DHL adds Shenzhen-Minsk route to West Corridor. 3
DHL RAIL WESTBOUND SERVICE Chengdu to Lodz in Moscow Hamburg Tilburg Duisburg Brest Warsaw Minsk Lodz Malaszewicze Nuremberg Poti Istanbul Izmir Railway Hubs Transit via China Connection. Asian connections Western Corridor Northern Corridor Southern Corridor (Trans Caspian Corridor) Zabaikalsk Dostyk Aktau Baku Alashankou Dostyk Manzhouli 13 days Harbin Shenyang Khorgos Zhengzhou Chengdu Chongqing Xian Changsha Shenzhen Lianyungang Suzhou Hefei Xiamen Dongguan Hong Kong 4
CROSS-BORDER ECOMMERCE OPERATIONAL FLOW. CARRIAGE BY RAIL Origin supplier pick-up Trucking Origin POL rail gateway Export clearance Rail carriage Destination POD Import rail gateway clearance B 2 B Trucking Destination warehouse / ecommerce FC Rail carriage 5
ECOMMERCE OPPORTUNITIES. CONSOLIDATION AND VALUE-ADDED SERVICES ORIGIN COUNTRY I N SUPPLIERS CHINA CONSOLIDATION CENTRE T R A N S I T DESTINATION COUNTRY FULFILMENT CENTRES EUROPE DE-CONSOLIDATION CENTRE Key Benefits § Reduced freight cost compared to AFR shipments and from increased container fill (utilization rate) § Faster speed-to-market § Reduced working capital through reduced inventory stockholding § Platform for additional value-add services with potential for further cost reduction 6
CASE STUDY. E-COMMERCE B 2 FC SOLUTION LCL RAILWAY FROM CN TO DE AMZ FCS CN Railway Station Export Clearance End to end transit time within 25 days, and providing off-line tracking visibility (8+ tracking events). Import Clearance • Within 25 days Distance: 11, 600 KM Transpor tation Pickup Hang Zhou • Solution to A Chinese ecommerce company at Hangzhou, shipping pets accessory to German Amazon fulfillment center. DE Railway Station DE AMZ FCS Next step Optimization q LCL by different customers loaded in full container q Enhance shipping gateway from 1 to 3 q Bring off-line tracking to online q Develop 1 st operation system Value Proposition ü Considerably cheaper compared to Air Freight ü Much faster door-door transit times than Ocean Freight ü Increase speed to market with lower logistics cost ü More reliability for transit time & better cash flow for customer ü Full visibility with at least 8 tracking events ü High quality and professional DHL service team ü One DHL product integrated services from DGF & DHLe. C ü Gain new market share under before transaction model ü Significant ecological advantage compared to Air Freight 7
16 + 1 THINK TANK NEEDS TO ADDRESS CHALLENGES JOINTLY WITH INDUSTRY! Cross-border ecommerce development requires: • Visibility and integrated customer service • Platform integration via enterprise systems • Training for customs and shippers/unified transit documents • EDI based clearance • Harmonized regulatory environment (e. g. customs, rail) Current challenges: Increased supply chain complexity • Customs • No “real” fiscal Union (VAT rates differ) • Very detailed customs cargo description required • High number of HS codes in transport unit • Paper based clearance slow for e. Commerce • Manual/Excel sheets in industry • Best practice information exchange Air/Ocean carriers • SMGS and CIM/COTIF both in use 8
BACKUP
KEY FACTS 2016 ABOUT DEUTSCHE POST DHL GROUP • About 510, 000 employees in more than 220 countries and territories (of which about 60% outside of Germany) • Group revenues: EUR 57. 3 bn | Group EBIT: EUR 3. 49 bn | Market capitalization 1): EUR 38. 760 bn • 59 m letters per workday in Germany | 4. 3 m parcels per workday in Germany | Around 28, 000 sales outlets in Germany • ~ 809, 000 international express shipments per day (Time Definite International) +7. 6% versus 2015 • 3. 6 m tons of air freight; 3. 1 m TEU 2) of ocean freight. No. 2 European road freight • 13. 7 m square meters 3) of warehouse space in contract logistics Source: Annual Report 2016; 1) As of 12/31/2016; 2) TEU = Twenty-foot equivalent unit; 3) Financial year 2015 10
OUR CR MISSION 2025: ZERO EMISSIONS We want to reduce our logistics-related emissions to zero by 2050. To get us there, we’ve set four milestones for 2025: • We want to increase our carbon efficiency by 50% over 2007 levels • We want to operate 70% of our own first and last mile services with clean pick-up and delivery solutions • We want more than 50% of our sales to incorporate Green Solutions • We want to train 80% of our employees to become certified Go. Green specialists and together with partners, we will plant one million trees each year 11
ONE BELT ONE ROAD POLICY (OBOR) 63% of the global population comprised of the Silk Road Economic Belt and the 21 st Century Maritime Silk Road. Provides CONNECTIVITY to over 50 countries 29% WORLD GDP of the 12
The Belt & Road will have positive effects on trade growth through hubsreducing outsidelogistics of Chinacosts, driving new trade deals and facilitating the development of new manufacturing export OBOR is a strong facilitator to enhance economy and culture communication. between Asia and Europe Cross-border ecommerce is a long-term megatrend and requires a sophisticated endto-end solution design & service offering 13
DHL RAIL EASTBOUND SERVICE Lodz to Chengdu in Moscow Hamburg Tilburg Duisburg Brest Lodz Malaszewicze Nuremberg Zabaikalsk Dostyk Alashankou Dostyk Manzhouli 16 days Harbin Khorgos Zhengzhou Railway Hubs Transit via China Connection Western Corridor Northern Corridor Chengdu Chongqing Suzhou 14
EAST ASIAN CONNECTIONS CHINA Transit via Chinese ports To/From Asia Pacific countries: JAPAN KOREA TAIWAN HONG KONG VIETNAM DHL RAILLINE DHL RAILCONNECT 15
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