Introduction continued - the merger with Exel and DHL Global Forwarding

Good morning all

Seems the UK summer has disappeared today with rain forecast for the next few days. Mind you we did have about 3 weeks of dry weather - only problem is that I'm going away this weekend on my bike (Suzuki GSXR750) to a motorcycle rally in Ashbourne, Derbyshire and I'm camping - perfect timing.

Anyway, back to the world of logistics. As I mentioned in my last post, things had been going really well at DHL Danzas Air & Ocean and we'd got the best of both worlds - we had the cache of the DHL brand name and we were still highly regarded in the market as a freight forwarder because of the Danzas name and heritage.

In late 2005, we got a major shock - Deutsche Post were in talks to purchase Exel Logistics, the world's largest contract logistics provider. Exel had a very strong brand and was the market leader in contract logistics. They also had a freight forwarding arm which had some blue chip clients such as Astra Zeneca so this was going to be another big merger. Frankly, most of my colleagues at the new Danzas AEI had only just recovered from the Danzas and Air Express International merger - and we also felt that it was going to interrupt the rise of DHL Danzas Air & Ocean whilst we digested another large company. I recall one of my directors once saying that in a merger, with all the disruption of staff and departments (and people leaving for other forwarders) the board expected to lose 15-20 of their customers. That really does seem crazy but I suppose, taking the long term view, the prize of a broader and better value proposition outweighed the cost of lost goodwill and lost customers.

Mergers are really quite tough, especially if you're in a sales role, and this is because the sales person tends to be the one who has the strongest relationship with the client and also the one who takes the flak if service dips or other issues arise which impact or frustrate the customer. At the very same time, you're still expected to go out there and win new customers when you know that your operational departments are being challenged by issues related to the integration eg lack of resources or the adoption of new operational procedures or systems.

So it was tough, and since my promotion to the Head of Trade Lane Development role, I'd opted to retain around 10 of my regional customers (from my Danzas Regional Sales Manager days in 1999-2000). I did this because it was my way of staying connected to the UK market, what our customers wanted and what the competition was doing. This gave me credibility with my team and it meant I was literally also out in the trenches with them in more ways than one. I always value my personal customers and I suppose that harks back to when I was the import manager at BAX Global (now DB Schenker by the way) or in regional sales for seven years at Kuehne & Nagel. If you're good at what you do, you can really enhance the customer experience and often gain more business from a client based on your commitment to them, and not just seeing clients as a means to earn a bonus or commission. My motto is that if you focus on the customer, and are willing to "get your hands dirty" when problems arise (which may not be your fault) that this builds trememdous loyalty and this is the very same principle I have kept at the heart of Straightforward Consultancy - going the extra mile for the customer, day in, day out. We've retained all of our logistics customers since we launched in 2010 so this is something I'm really proud of. Our customers clearly feel that we are genuinely adding value for them to renew their partnership with us each year. I'll talk about some of those customers as the blog evolves.

So, back to the Exel merger. Well, we learned pretty quickly that Exel's freight forwarding (Exel Freight Management) business in the UK was very export air dominated (as was Air Express International) whereas the Danzas business was import driven. There was a reason for this. Both AEI and Exel were very focused on MNC (multi-national customers) whereas Danzas was generally focused on SME (small-medium sized customers).

It is generally accepted that 70% of worldwide import traffic is consignee controlled (so 30% of export traffic is shipper controlled). This is why many UK forwarders have a fairly large regional sales force, visiting mainly import clients in the various UK regions where business is open to negotiation year round (no contracts as with MNC clients) and this sales model still exists today across pretty much every freight forwarder, certainly in the UK.

The Exel merger was, once again, a challenge but there was one good thing, which was that Geoff Corpe, the former Exel Freight Management MD was appointed as the UK MD of the combined business. I had to go for interview and effectively re-apply for the role of Head of Trade Lane Development but I was still very oassionate about what we were doing in the UK Trade Lane Management Team and in the intervview talked about how I had brought innovation to the trade lane initiative since I joined in Sept 2000. I'd also been part of a Global trade lane think tank formed by Eric Pilling, our Global Sales Head along with 3-4 other prominent trade lane heads from North America, Latin America, Europe and Asia which clearly helped and I was appointed to a new role, a little more senior I suppose. General Manager Trade Lane Development. Talking a little more about Geoff Corpe, who I reported to directly for about a year or so (we had no Sales Director at that point) he was very supportive, totally neutral with the Exel and Danzas staff and always contactable. A pleasure to work for.

In April 2006, the new company, DHL Global Forwarding (UK) was formed and my team had become even larger, as it was decided to expand the team as opposed to making redundancies. At that point I recall my team had become around 13 people. More about DHL Global Forwarding (DGF) next time.