DC Velocity - August 2018

different service niche, and, perhaps most important, its own operating platform. The siloed model has been by design. DHL Express, for instance, offers time-definite service in the U.S. with an international origin or destination point, whereas DHL E-Commerce interacts with USPS for domestic services that aren’t time-specific and are offered at a lower price point. Integrating the sales, marketing, and IT (information technology) services for different types of customers could create more problems than it solves.

Spratt said DHL is working with third-party software developers to build more connectivity across its disparate business units. “It’s a huge focus for us,” he said.

To be sure, there are areas of cooperation. DHL has a dedicated unit that cross-sells its portfolio to big shippers. In addition, the Americas e-commerce unit uses space in four of DHL Supply Chain’s fulfillment centers— Columbus, Ohio; Mexico City; Los Angeles; and Newark, N.J., which was scheduled to open around mid-July. The e-commerce unit also leverages its sister unit’s technology, according to Spratt.

If there is one product that underscores how DHL is
reacting to the changing times, it is “Parcel Metro,” which
was launched last March in Chicago. Run by the e-com-
merce unit, Parcel Metro provides e-commerce deliveries
without utilizing DHL vans or drivers. Instead, it relies on
local and regional professional delivery firms as well as a
cast of crowd-sourced citizen drivers and their vehicles,
both of which are vetted by DHL before hitting the road.
DHL’s goal is to use its brand and technology to build
credibility with retailers and their third-party e-commerce
partners such as Shopify. DHL also wants to attract a critical
mass of qualified drivers who can cover as much geography
as possible. In addition to Chicago, the product has been
rolled out in New York, Dallas, and Los Angeles. It was
expected to be launched in Atlanta at this writing, and will
be available in San Francisco and Washington, D.C., later
in the year.
Perhaps most important, DHL has gotten the jump on
rivals FedEx Corp. and UPS Inc., neither of which has a
similar product. If it succeeds, Parcel Metro is likely to
boost the DHL unit’s 2 percent share of the U.S.-origin
e-commerce delivery market.

One unit that is unlikely to leverage Parcel Metro, however, is DHL Express. Its U.S. operations are unionized, and it’s hard to imagine the Teamsters union going along with such a concept. What’s more, Greg Hewitt, the CEO of the unit’s U.S. operations, said in a separate interview that the DHL name is too powerful not to be as visible as possible. “We see great value in the DHL-branded vehicle,” he said.

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