WEBVTT - DHL CEO Tobias Meyer Talks Navigating U.S. Tariffs

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Earlier today, Bloomberg's Romaine Bostick was joined by DHL Group

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<v Speaker 2>CEO doctor Tobias Meyer here on Bloomberg.

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<v Speaker 3>We shouldn't forget the benefits of trade and that it

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<v Speaker 3>has helped to curb inflation. It makes goods more widely available.

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<v Speaker 3>It helps us in different countries to participate in technological progress.

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<v Speaker 2>Not every nation is able to do a.

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<v Speaker 3>Big plant of semiconductors or develop vaccines, develop medical devices.

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<v Speaker 2>So the world needs trade also, the US needs trade.

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<v Speaker 3>The second point on the discussions of trade imbalances, we

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<v Speaker 3>also have services, and that's often forgotten. Europe is importing

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<v Speaker 3>a lot of services and these are very profitable for

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<v Speaker 3>US companies, so I think that's important to keep in

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<v Speaker 3>mind as well. The US is a highly beneficiary of

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<v Speaker 3>open services trade, so we should not only focus on

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<v Speaker 3>good now. If we look at goods, there was quite

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<v Speaker 3>some termol. I think the biggest operational impact was the

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<v Speaker 3>four day pausing on the Deminimus, which was then withdrawn

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<v Speaker 3>again because it led to chaos at many US ports

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<v Speaker 3>of entry. We had our challenges, but US customs also

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<v Speaker 3>had its challenges. It's nearly doubling the number of entries required.

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<v Speaker 3>Nobody was really prepared for it because it wasn't clear

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<v Speaker 3>the instructions came out after the effective date, and that

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<v Speaker 3>is truly causing a lot of headaches for our customers

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<v Speaker 3>and is causing a lot of work in our operations

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<v Speaker 3>to adjust to these ever changing requirements, especially on such

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<v Speaker 3>short notice.

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<v Speaker 1>So just to be clear, though, do you pick up

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<v Speaker 1>business as a result of that, meaning at least on

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<v Speaker 1>the consulting side and the logistics side, does that actually

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<v Speaker 1>aid you that type of disruption.

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<v Speaker 3>I think we are structurally very well positioned in this market.

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<v Speaker 3>We are structurally well positioned because of our market share

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<v Speaker 3>in many US related lanes isn't that big. We are

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<v Speaker 3>very strong in Asia, Middle East, Africa, so these are.

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<v Speaker 2>Our real strongholds.

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<v Speaker 3>Also for DHL Express as it relates to the US,

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<v Speaker 3>it's just so regrettable. It's not really adding efficiency to

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<v Speaker 3>our operations and not adding efficiency to our customer operations.

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<v Speaker 3>So we gain new business, we do more customs filings,

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<v Speaker 3>for instance, So it's not necessarily bad for US, but

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<v Speaker 3>I think overall these disruptions are not good for the

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<v Speaker 3>economic development and the building of wealth with people.

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<v Speaker 1>It's this deminimous rule is reinstate. If that exemption is

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<v Speaker 1>indeed taken away and the Trump administration revisits that, is

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<v Speaker 1>that going to affect your package volumes or were you

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<v Speaker 1>already sort of above that in the way that you

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<v Speaker 1>consolidate it stuff onto your planes.

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<v Speaker 3>So indeed, our exposure to those deminimus shipments is relatively low.

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<v Speaker 3>We have some in our express network, also in our

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<v Speaker 3>global forwarding network, but mainly what we do in the

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<v Speaker 3>space of e commerce is domestic distribution as well in

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<v Speaker 3>Europe and in good partnership with the USPS, the United

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<v Speaker 3>States Postal Service also in the US. I do think

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<v Speaker 3>and we understand that the administration might want to alter

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<v Speaker 3>the minimus. Europe has also done so with de facto

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<v Speaker 3>don't have a real deminimus anymore. We have a simplified

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<v Speaker 3>filing procedure, but for every shipment you need to pay

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<v Speaker 3>import VAT. So there are transitions possible to apply sensible

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<v Speaker 3>rules to also create income for the state.

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<v Speaker 2>But it's just good to do it in an orderly fashion.

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<v Speaker 1>What is your relationship with the US Postal Service right now?

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<v Speaker 1>Are they still your last mile provider?

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<v Speaker 3>Yes, they are exclusive last mile provider. It's something that

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<v Speaker 3>I think benefits the United Postal Service greatly because we

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<v Speaker 3>deliver volume into that network. It's mainly domestic volume that

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<v Speaker 3>comes from American merchants, particularly many as aes who sell online.

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<v Speaker 1>Given the political climate, do you worry at all about

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<v Speaker 1>maintaining that relationship.

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<v Speaker 2>Look, it would not be rational to change that.

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<v Speaker 3>The United States Postal Service, and we understand I think

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<v Speaker 3>that better business better than most because we are in

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<v Speaker 3>that very same position in our own country in Germany

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<v Speaker 3>that we need to provide a universal service to all

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<v Speaker 3>citizens and have obligations.

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<v Speaker 2>That are quite costly to do so.

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<v Speaker 3>So we sympathize with the position and the difficulties that

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<v Speaker 3>the United States Postal Service has. We can be helpful

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<v Speaker 3>to help bring volume into that network. We do not

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<v Speaker 3>cherry pick, which has been criticism with some other players

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<v Speaker 3>that depending on the type of ship and or depending

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<v Speaker 3>on the season, you put it in your own network

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<v Speaker 3>or you then when it's not profitable or you don't

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<v Speaker 3>have the capacity in your own network, then you use

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<v Speaker 3>the United States Postal Service. That is an arbitrage that

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<v Speaker 3>I think, for good reasons, is looked upon very critically,

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<v Speaker 3>but we are not doing that.