1 00:00:08,000 --> 00:00:11,600 Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transports Podcast. 2 00:00:11,680 --> 00:00:14,720 Speaker 1: I'm your host Lee Klasgow, Senior Freight Transportation. Let's just 3 00:00:14,720 --> 00:00:18,280 Speaker 1: exaandle Us at Bloomberg Intelligence, Bloomberg's in house research arm. 4 00:00:18,520 --> 00:00:22,439 Speaker 1: We're delighted to have Tim robertson CEO of DHL Forwarding America's, 5 00:00:22,760 --> 00:00:26,040 Speaker 1: a role he has held since October twenty twenty on 6 00:00:26,079 --> 00:00:29,240 Speaker 1: the podcast today. Tim has over twenty two years of 7 00:00:29,280 --> 00:00:32,519 Speaker 1: experience in the logistics industry. He began his career working 8 00:00:32,560 --> 00:00:36,240 Speaker 1: at DHL in two thousand and two and held various 9 00:00:36,280 --> 00:00:39,280 Speaker 1: management positions before being promoted into his current role in 10 00:00:39,320 --> 00:00:42,960 Speaker 1: October of twenty twenty. He holds a master's degree and 11 00:00:43,080 --> 00:00:47,040 Speaker 1: Business administration from Harvard Business School and a bachelor's degree 12 00:00:47,080 --> 00:00:50,240 Speaker 1: with first class honors in chemical engineering from the University 13 00:00:50,280 --> 00:00:55,880 Speaker 1: of Sydney and Australia. Thanks for joining the Talking Transports Podcast, Tim. 14 00:00:55,080 --> 00:00:55,680 Speaker 2: My pleasure. 15 00:00:55,800 --> 00:00:56,080 Speaker 3: Lee. 16 00:00:56,080 --> 00:00:57,200 Speaker 2: Great to be with you today. 17 00:00:57,840 --> 00:01:01,200 Speaker 1: So you know I know DHL, Well everyone may not 18 00:01:01,320 --> 00:01:05,200 Speaker 1: know DHL. Can you talk about DHL and it's forwarding business? 19 00:01:05,800 --> 00:01:06,039 Speaker 3: Yeah? 20 00:01:06,080 --> 00:01:09,560 Speaker 2: Thanks Leey. I mean DHL Global Forwarding is the market 21 00:01:09,680 --> 00:01:16,200 Speaker 2: leading logistics provider for international air freight. Ocean freight, customs, 22 00:01:16,240 --> 00:01:21,840 Speaker 2: transportation and warehousing services. Often we like to tell our 23 00:01:21,880 --> 00:01:26,800 Speaker 2: customers we're a bit of a travel agent for heavyweight 24 00:01:26,920 --> 00:01:32,039 Speaker 2: freight that moves around the world. We're operating in over 25 00:01:32,080 --> 00:01:37,800 Speaker 2: two hundred companies worldwide, and we really consider ourselves. We 26 00:01:37,880 --> 00:01:41,280 Speaker 2: focus a lot on our service promise, which is to 27 00:01:41,840 --> 00:01:45,959 Speaker 2: deliver excellence in a global basis, and that really is 28 00:01:46,000 --> 00:01:47,720 Speaker 2: what DHL Global Forwarding is all about. 29 00:01:47,800 --> 00:01:51,000 Speaker 1: Lead Now, would you say that the DHL Forwarding is 30 00:01:51,040 --> 00:01:54,080 Speaker 1: more of an air freight forwarder an ocean forwarder or 31 00:01:54,200 --> 00:01:55,240 Speaker 1: is the mix pretty even? 32 00:01:55,680 --> 00:01:57,960 Speaker 2: Yeah, the mix is pretty even. I think that's a 33 00:01:58,040 --> 00:02:03,280 Speaker 2: key part of our solution portfolio that were quite balanced 34 00:02:03,280 --> 00:02:07,360 Speaker 2: in terms of our air freight offering, our ocean freight offering, 35 00:02:08,040 --> 00:02:10,920 Speaker 2: also our customs offering and then and then over the 36 00:02:11,000 --> 00:02:14,799 Speaker 2: road offerings that we also have, so we offer the 37 00:02:14,840 --> 00:02:19,440 Speaker 2: full suite of global transportation services. 38 00:02:20,440 --> 00:02:23,160 Speaker 1: So, ocean and air frareates have been on quite a 39 00:02:23,240 --> 00:02:26,240 Speaker 1: ride since the pandemic. They've seen some incredible heights and 40 00:02:26,280 --> 00:02:29,880 Speaker 1: some incredible lows. On the ocean side. You know, we're 41 00:02:29,880 --> 00:02:33,080 Speaker 1: seeing rates quote unquote normalized from the issues in the 42 00:02:33,120 --> 00:02:36,280 Speaker 1: Red Sea. Can you talk about what you are seeing 43 00:02:36,320 --> 00:02:40,720 Speaker 1: in terms of ocean and air rates today in kind 44 00:02:40,720 --> 00:02:42,560 Speaker 1: of going forward. 45 00:02:42,360 --> 00:02:45,839 Speaker 2: Yeah, Lee, and I've just come off a week out 46 00:02:45,880 --> 00:02:49,400 Speaker 2: in Los Angeles at the Transpacific Maritime Conference, So there 47 00:02:49,400 --> 00:02:53,680 Speaker 2: are a lot of great discussions both with ocean carriers 48 00:02:53,760 --> 00:02:57,160 Speaker 2: with our shippers as well in terms of what the 49 00:02:58,040 --> 00:03:02,960 Speaker 2: outlook is for the ocean market moving forward. As you say, 50 00:03:03,120 --> 00:03:09,720 Speaker 2: the Red Sea shipping crisis that we are experiencing has 51 00:03:10,320 --> 00:03:15,200 Speaker 2: kept rates high here as now the ocean carriers have 52 00:03:15,560 --> 00:03:19,959 Speaker 2: larger distances to traverse going down through the past the 53 00:03:20,040 --> 00:03:24,520 Speaker 2: Cape of Good Hope here. That has obviously eaten up 54 00:03:24,639 --> 00:03:28,200 Speaker 2: a lot of the excess capacity that was in the 55 00:03:28,240 --> 00:03:34,560 Speaker 2: market coming out of post COVID, and that then took 56 00:03:34,600 --> 00:03:38,880 Speaker 2: the rates up up to the extent that they were here. 57 00:03:39,000 --> 00:03:42,640 Speaker 2: I think. In addition to that, you know, we then 58 00:03:42,760 --> 00:03:45,960 Speaker 2: saw a little bit of container imbalance because obviously those 59 00:03:45,960 --> 00:03:50,160 Speaker 2: containers have got to get back from let's say Europe 60 00:03:50,560 --> 00:03:54,880 Speaker 2: or North America into the Asian ports. And with the 61 00:03:54,960 --> 00:03:57,720 Speaker 2: disruption again in the Red Sea, and then you throw 62 00:03:57,800 --> 00:04:00,840 Speaker 2: in there what's happened with the water level in the 63 00:04:00,880 --> 00:04:06,120 Speaker 2: Panama Canal, that has obviously created more volatility and kept 64 00:04:06,160 --> 00:04:10,720 Speaker 2: the rates where they are. Obviously, as it relates to 65 00:04:12,640 --> 00:04:15,360 Speaker 2: the outlook here, I think a lot of it will 66 00:04:15,360 --> 00:04:21,320 Speaker 2: depend on ultimately how the Red Sea crisis is resolved 67 00:04:21,360 --> 00:04:27,679 Speaker 2: here and having vessels go back through the Suez, which 68 00:04:27,720 --> 00:04:31,840 Speaker 2: probably is not going to happen in a real material 69 00:04:31,880 --> 00:04:36,280 Speaker 2: way anytime soon. And at the same time, we've got 70 00:04:36,320 --> 00:04:41,760 Speaker 2: additional capacity that is coming back into the market within 71 00:04:41,880 --> 00:04:45,359 Speaker 2: the ocean carries, which is likely to come in later 72 00:04:46,320 --> 00:04:51,600 Speaker 2: this year and then into twenty twenty five. So I 73 00:04:51,640 --> 00:04:55,560 Speaker 2: think the rate levels that we're at right now, if 74 00:04:55,640 --> 00:04:59,919 Speaker 2: you listen to the experts at TPM, are likely to 75 00:05:00,080 --> 00:05:04,120 Speaker 2: stay kind of where they are until we see any 76 00:05:04,160 --> 00:05:08,800 Speaker 2: real resolution in the Red Sea and then the additional 77 00:05:08,839 --> 00:05:13,760 Speaker 2: capacity in twenty twenty five. On top of that, I 78 00:05:13,880 --> 00:05:18,480 Speaker 2: throw in another complexity here. We have the ISLA negotiations 79 00:05:18,520 --> 00:05:23,440 Speaker 2: for the East Coast ports also happening here in North America. 80 00:05:24,760 --> 00:05:28,200 Speaker 2: We're talking to a lot of customers right now about 81 00:05:28,720 --> 00:05:33,560 Speaker 2: diversifying their flows back over to the West Coast and 82 00:05:33,640 --> 00:05:36,359 Speaker 2: providing solutions for them so that in the event that 83 00:05:36,400 --> 00:05:40,400 Speaker 2: there is some kind of disruption later this year, that 84 00:05:40,440 --> 00:05:44,040 Speaker 2: they've got still continuity in their supply chains. 85 00:05:44,640 --> 00:05:47,760 Speaker 1: Yeah, that the labor contract I believe comes due in September, 86 00:05:47,839 --> 00:05:50,520 Speaker 1: so you'll probably see more and more of that as 87 00:05:50,560 --> 00:05:54,160 Speaker 1: we head into the summer. Are you So you're not 88 00:05:54,200 --> 00:05:58,880 Speaker 1: seeing that much changes and shipments to the West coast 89 00:05:58,880 --> 00:06:02,279 Speaker 1: from the East coast people. Are your customers just dealing 90 00:06:02,320 --> 00:06:04,760 Speaker 1: with the ten to fifteen extra days it takes to 91 00:06:04,960 --> 00:06:09,680 Speaker 1: get a shipment from called Asia to the East coast. 92 00:06:10,560 --> 00:06:14,440 Speaker 2: Yeah, I think that has been kind of built into 93 00:06:14,800 --> 00:06:18,760 Speaker 2: our supply chains at this point where we're seeing more 94 00:06:20,279 --> 00:06:22,960 Speaker 2: the discussion that we're having right now is in preparation 95 00:06:23,240 --> 00:06:28,560 Speaker 2: for the ILW negotiations, as you have mentioned there right 96 00:06:28,640 --> 00:06:33,400 Speaker 2: that we're having real not just conversations, but we're we're 97 00:06:33,440 --> 00:06:38,880 Speaker 2: seeing customers now divert cargo over the West coast here 98 00:06:39,240 --> 00:06:43,760 Speaker 2: in preparation for what potentially could happen later in the year. 99 00:06:43,800 --> 00:06:47,960 Speaker 2: And part of that is also ensuring that the customer 100 00:06:48,040 --> 00:06:52,400 Speaker 2: has got a robust transload solution which we offer, which 101 00:06:52,440 --> 00:06:56,000 Speaker 2: we obviously provide for them, so that they can now 102 00:06:57,560 --> 00:06:59,760 Speaker 2: transload that cargo if they don't want to put it 103 00:06:59,800 --> 00:07:02,240 Speaker 2: on but they have more of an expedited need, we 104 00:07:02,279 --> 00:07:05,719 Speaker 2: can transload that and then put it over the road 105 00:07:06,360 --> 00:07:09,640 Speaker 2: and truck that to the East coast. That model was 106 00:07:09,680 --> 00:07:12,920 Speaker 2: something that I think we really perfected during the pandemic, 107 00:07:14,080 --> 00:07:16,160 Speaker 2: and now we see a lot of customers starting to 108 00:07:16,200 --> 00:07:19,720 Speaker 2: access that again in preparation for what could happen later 109 00:07:19,720 --> 00:07:20,160 Speaker 2: in the year. 110 00:07:20,840 --> 00:07:23,080 Speaker 1: Right. And simply put, transloading is just you take the 111 00:07:23,120 --> 00:07:26,280 Speaker 1: freight out of the containers, the forty foot containers, and 112 00:07:26,320 --> 00:07:29,360 Speaker 1: you put them in fifty three foot trailing equipment that 113 00:07:29,760 --> 00:07:30,680 Speaker 1: the trucks. 114 00:07:31,200 --> 00:07:35,320 Speaker 2: Huh exactly instead of putting it onto the rail, and 115 00:07:36,200 --> 00:07:38,960 Speaker 2: you know the extended transit that that can take, particularly 116 00:07:39,000 --> 00:07:41,200 Speaker 2: to get from the West Coast to the East coast. 117 00:07:42,080 --> 00:07:44,920 Speaker 2: The transload operation will take that from the forty foot 118 00:07:44,920 --> 00:07:48,880 Speaker 2: container and you can actually transload you know three into 119 00:07:48,920 --> 00:07:52,720 Speaker 2: two as they say, or or other ratios here to 120 00:07:52,840 --> 00:07:56,480 Speaker 2: improve the efficiency and get that into a fifty three 121 00:07:56,520 --> 00:07:59,680 Speaker 2: foot trailer to truck it across the country. You use 122 00:07:59,720 --> 00:08:02,960 Speaker 2: team drivers, you can do it even quicker. So that's 123 00:08:03,240 --> 00:08:07,640 Speaker 2: a solution that we've perfected here. We have transloared operations 124 00:08:07,720 --> 00:08:10,200 Speaker 2: up and down the East Coast and the West Coast, 125 00:08:10,240 --> 00:08:12,680 Speaker 2: and we see customers now starting to access that. 126 00:08:13,520 --> 00:08:16,240 Speaker 1: You mentioned TPM. Unfortunately I missed it this year to 127 00:08:16,840 --> 00:08:20,200 Speaker 1: a conference that I like to go to most years. 128 00:08:20,640 --> 00:08:24,600 Speaker 1: What were the biggest takeaways from TPM this year, because 129 00:08:24,640 --> 00:08:27,080 Speaker 1: I know there's been a lot of obviously there's everyone 130 00:08:27,160 --> 00:08:29,760 Speaker 1: talking about the Red Sea, but there is changes in 131 00:08:30,520 --> 00:08:35,280 Speaker 1: liner alliances. That's probably on the front of a lot 132 00:08:35,280 --> 00:08:36,120 Speaker 1: of people's minds. 133 00:08:36,800 --> 00:08:41,640 Speaker 2: Yeah, I think the probably one of the key messages. 134 00:08:41,720 --> 00:08:44,360 Speaker 2: And I've been going to TPM here for a number 135 00:08:44,360 --> 00:08:46,280 Speaker 2: of years and I think there's some key messages and 136 00:08:46,280 --> 00:08:50,560 Speaker 2: then there's also some sort of key takeaways in terms 137 00:08:50,559 --> 00:08:54,360 Speaker 2: of the maturity of the industry. I think the notion 138 00:08:54,640 --> 00:09:01,440 Speaker 2: of resilience again was really at the at the forefront 139 00:09:01,480 --> 00:09:05,200 Speaker 2: of many of the discussions here when you look at 140 00:09:05,200 --> 00:09:07,240 Speaker 2: all the disruptions that are happening, not just in the 141 00:09:07,280 --> 00:09:11,040 Speaker 2: Red Sea, but you know, continued issues in the conflicts 142 00:09:11,040 --> 00:09:14,240 Speaker 2: in the Ukraine and the Middle East and other let's 143 00:09:14,240 --> 00:09:18,120 Speaker 2: call it trade tensions. What that now means in terms 144 00:09:18,160 --> 00:09:23,559 Speaker 2: of having resilient supply chains but also de risking supply chains. 145 00:09:23,640 --> 00:09:27,200 Speaker 2: So that was I think a key message that was 146 00:09:27,240 --> 00:09:34,240 Speaker 2: talked about the changing face of the alliance landscape. I 147 00:09:34,280 --> 00:09:41,160 Speaker 2: think was also a topic. Obviously it's still early days here, 148 00:09:41,240 --> 00:09:45,320 Speaker 2: so it's very difficult to predict ultimately what the outcome 149 00:09:46,000 --> 00:09:49,360 Speaker 2: is going to be. Now. Of course, one of those 150 00:09:49,880 --> 00:09:54,600 Speaker 2: new alliances, the real driving force behind that is on 151 00:09:54,679 --> 00:09:58,640 Speaker 2: improved schedule liability, and you know that is something that 152 00:09:58,679 --> 00:10:03,960 Speaker 2: we are heavy promoting, right, I mean, schedule reliability today 153 00:10:04,920 --> 00:10:07,480 Speaker 2: as an example on the transpecific is back down in 154 00:10:07,559 --> 00:10:10,000 Speaker 2: the in the twenty and thirty percent. And if you 155 00:10:10,760 --> 00:10:13,840 Speaker 2: if I told you Lee that you order your Uber 156 00:10:14,520 --> 00:10:17,320 Speaker 2: and it's only going to turn up one in five times, 157 00:10:17,600 --> 00:10:21,280 Speaker 2: you might you might find another form of transportation. So 158 00:10:21,600 --> 00:10:26,079 Speaker 2: anything that can be done to improve global ocean schedule 159 00:10:26,160 --> 00:10:30,160 Speaker 2: reliability and to the extent that it can get above 160 00:10:30,240 --> 00:10:33,839 Speaker 2: ninety percent, is obviously good for the industry. But I 161 00:10:33,880 --> 00:10:37,440 Speaker 2: think it's still early days in terms of how those 162 00:10:37,480 --> 00:10:43,120 Speaker 2: alliances are shaking out. Obviously, they're what we're watching for 163 00:10:43,160 --> 00:10:44,720 Speaker 2: now is what's going to happen with some of the 164 00:10:44,760 --> 00:10:49,679 Speaker 2: other alliances in the in the global ocean market. So 165 00:10:50,040 --> 00:10:53,600 Speaker 2: I think a lot of discussions there For me. Finally, 166 00:10:53,600 --> 00:10:57,080 Speaker 2: I think one of the my sort of key takeaways 167 00:10:57,320 --> 00:11:01,560 Speaker 2: really was around the level of maturity now within the 168 00:11:01,600 --> 00:11:09,520 Speaker 2: industry between shipper, forwarder, carrier, other stakeholder, whether it's a port, 169 00:11:09,679 --> 00:11:17,360 Speaker 2: whether it's a government entity. Historically there has been more 170 00:11:17,480 --> 00:11:24,360 Speaker 2: adversarial type reactions them versus us. What I think really 171 00:11:24,400 --> 00:11:28,480 Speaker 2: the pandemic has accelerated is the notion of long term 172 00:11:28,520 --> 00:11:35,200 Speaker 2: partnerships ultimately being able to drive sustained value in global 173 00:11:35,240 --> 00:11:37,559 Speaker 2: supply chain. And so when you need to build resiliency 174 00:11:37,600 --> 00:11:41,280 Speaker 2: in when you need to de risk, it's much easier 175 00:11:41,320 --> 00:11:45,120 Speaker 2: to do that when you have a partner that understands 176 00:11:45,120 --> 00:11:48,840 Speaker 2: your business, that understands you, and that is willing to 177 00:11:48,920 --> 00:11:51,840 Speaker 2: make investments for the long term. And so that I 178 00:11:51,880 --> 00:11:54,960 Speaker 2: think that's very positive. I think that's really constructive for 179 00:11:55,000 --> 00:11:58,320 Speaker 2: the industry that we now talk about much more mature 180 00:11:58,400 --> 00:12:03,120 Speaker 2: relationships as opposed to highly highly transactional relationships. 181 00:12:02,640 --> 00:12:05,480 Speaker 1: And the changes in alliances. Does that really change the 182 00:12:05,480 --> 00:12:07,640 Speaker 1: way DHL Forwarding does business. 183 00:12:08,440 --> 00:12:12,240 Speaker 2: You know, this doesn't really impact us in terms of 184 00:12:12,320 --> 00:12:16,280 Speaker 2: how we operate at this pointly. Obviously we're going to 185 00:12:16,400 --> 00:12:19,280 Speaker 2: keep a close eye on this. We have our preferred 186 00:12:19,280 --> 00:12:23,080 Speaker 2: and strategic carriers that we work with. But I think 187 00:12:23,120 --> 00:12:28,120 Speaker 2: this is also one of the values that we now 188 00:12:28,240 --> 00:12:31,960 Speaker 2: really pitch as as DHL Global Forwarding, because it really 189 00:12:32,000 --> 00:12:37,640 Speaker 2: doesn't matter the changing nature of the alliances if you 190 00:12:37,720 --> 00:12:40,720 Speaker 2: work with DHL Global Forwarding, you can have all the 191 00:12:40,760 --> 00:12:43,960 Speaker 2: different flavors in the ice cream shop as opposed to 192 00:12:44,000 --> 00:12:48,320 Speaker 2: having just vanilla or just chocolate, or just strawberry. And 193 00:12:48,360 --> 00:12:52,360 Speaker 2: that is what I think large ship is, but also 194 00:12:52,559 --> 00:12:55,400 Speaker 2: very importantly smaller ships, which I'll talk about here here 195 00:12:55,440 --> 00:12:57,360 Speaker 2: in a minute, because I think this does change the 196 00:12:57,480 --> 00:13:01,280 Speaker 2: nature for the small and medium size enterprise. But the 197 00:13:01,360 --> 00:13:05,160 Speaker 2: large ship is now they look at the changing alliances, 198 00:13:05,640 --> 00:13:08,400 Speaker 2: I think they start to see even more value in 199 00:13:08,440 --> 00:13:13,439 Speaker 2: a forwarder that can give them access to the full 200 00:13:13,600 --> 00:13:19,479 Speaker 2: suite of carriers and ultimately the full suite of service offerings. 201 00:13:19,600 --> 00:13:22,160 Speaker 2: I think for the smaller ship, or if I can 202 00:13:22,400 --> 00:13:23,960 Speaker 2: hit on that for a little bit, because it's an 203 00:13:24,000 --> 00:13:27,680 Speaker 2: area that we're tremendously focused on, we think that we 204 00:13:27,800 --> 00:13:31,520 Speaker 2: have a great value proposition for the small and medium 205 00:13:31,559 --> 00:13:35,280 Speaker 2: sized enterprise that is either looking to access from new 206 00:13:35,360 --> 00:13:40,960 Speaker 2: markets to export or importing goods for perhaps you know, 207 00:13:41,120 --> 00:13:44,000 Speaker 2: some production that they're doing here in the US. 208 00:13:44,480 --> 00:13:45,720 Speaker 1: How small is too small? 209 00:13:46,080 --> 00:13:49,760 Speaker 2: I mean for us it's probably I wouldn't say any 210 00:13:49,880 --> 00:13:52,559 Speaker 2: anything as so such thing as too small. The reason 211 00:13:52,600 --> 00:13:55,680 Speaker 2: I say that is it's much more about potential. You know, 212 00:13:55,720 --> 00:14:01,559 Speaker 2: we've got. We got very large customers today who ten 213 00:14:01,559 --> 00:14:04,760 Speaker 2: to fifteen years ago, also twenty years ago when I 214 00:14:04,800 --> 00:14:06,920 Speaker 2: was running a station in Los Angeles and we had 215 00:14:06,920 --> 00:14:11,840 Speaker 2: a few dot com companies that came and we're just 216 00:14:11,960 --> 00:14:16,320 Speaker 2: starting to access international markets either importing product or exporting 217 00:14:16,320 --> 00:14:18,680 Speaker 2: and exporting. Back then, this could have been they had 218 00:14:18,720 --> 00:14:21,760 Speaker 2: two export shipments a year that they were starting with. 219 00:14:22,200 --> 00:14:26,440 Speaker 2: You know, those companies have now grown to be major 220 00:14:26,480 --> 00:14:31,480 Speaker 2: global multinationals. So no company is too small if the 221 00:14:31,520 --> 00:14:33,880 Speaker 2: potential can be great, right, And that's a lot of 222 00:14:33,960 --> 00:14:37,680 Speaker 2: about what we what we access, and how we look 223 00:14:37,720 --> 00:14:41,720 Speaker 2: at those customer segments. But if you think about that segment, 224 00:14:42,720 --> 00:14:48,240 Speaker 2: tremendous volatility in the marketplace, you've got consolidation of these alliances. 225 00:14:48,960 --> 00:14:54,960 Speaker 2: They often don't have sophisticated dedicated logistics teams. They need 226 00:14:55,000 --> 00:14:57,200 Speaker 2: a partner for them to be able to grow. And 227 00:14:57,240 --> 00:15:01,360 Speaker 2: that's where we see a tremendous amount of growth and 228 00:15:01,400 --> 00:15:04,560 Speaker 2: it's where we're making pretty big, big investments to support 229 00:15:04,920 --> 00:15:05,640 Speaker 2: those customers. 230 00:15:06,400 --> 00:15:09,080 Speaker 1: You mentioned in the beginning of the conversation that in 231 00:15:09,360 --> 00:15:14,800 Speaker 1: addition to traditional forwarding services, you provide warehousing and other 232 00:15:14,880 --> 00:15:17,760 Speaker 1: logistics services. Can can you go a little deeper into 233 00:15:17,800 --> 00:15:21,160 Speaker 1: that exactly kind of what services DHL Forwarding provides. 234 00:15:21,560 --> 00:15:25,320 Speaker 2: Yeah, I mentioned also custom services as well. That's a 235 00:15:25,360 --> 00:15:30,040 Speaker 2: critical value add that we provide globally and here in 236 00:15:30,080 --> 00:15:34,160 Speaker 2: the America's region, across all of the sixteen countries that 237 00:15:34,200 --> 00:15:40,040 Speaker 2: we operate in, we provide expert custom services. We provide 238 00:15:40,040 --> 00:15:44,400 Speaker 2: free trade zone services, duty drawback services, so anything that 239 00:15:44,520 --> 00:15:48,080 Speaker 2: an importer or an exporter needs to do to work 240 00:15:48,120 --> 00:15:53,880 Speaker 2: with the local customs authorities and really facilitate seamless trade. 241 00:15:54,200 --> 00:15:56,440 Speaker 2: That's a big part of what we do here in 242 00:15:56,480 --> 00:16:00,160 Speaker 2: the United States. We're operating multiple free trade zone operation 243 00:16:01,400 --> 00:16:08,120 Speaker 2: for our customers across Central and South America. We're operating 244 00:16:09,200 --> 00:16:14,320 Speaker 2: international warehousing sites where we're doing some warehousing fulfillment distribution 245 00:16:15,280 --> 00:16:19,720 Speaker 2: for our specific companies in Central America as an example. 246 00:16:20,320 --> 00:16:24,960 Speaker 2: And then we have another, i think really interesting product 247 00:16:24,960 --> 00:16:29,080 Speaker 2: that we offer, which is our industrial projects products. So 248 00:16:29,160 --> 00:16:33,760 Speaker 2: this is really the true heavy lift market where you 249 00:16:33,880 --> 00:16:40,880 Speaker 2: have major capital investments happening and that require tremendous logistics support. 250 00:16:41,200 --> 00:16:45,440 Speaker 2: Probably the best example of that is here in the 251 00:16:45,560 --> 00:16:49,600 Speaker 2: United States. The Chips Act is bringing significant investment into 252 00:16:49,680 --> 00:16:56,800 Speaker 2: building semiconductor and foundry capacity here in the US. There's 253 00:16:57,040 --> 00:17:00,200 Speaker 2: a major logistics component to support that, whether it's on 254 00:17:00,240 --> 00:17:05,000 Speaker 2: the construction of those fabs, whether it is on warehousing 255 00:17:05,080 --> 00:17:07,720 Speaker 2: to support the build of the fab and then ultimately 256 00:17:07,720 --> 00:17:10,800 Speaker 2: the finished goods that come out of that fab. That's 257 00:17:10,840 --> 00:17:15,560 Speaker 2: something that we're investing heavily in. We've got unique capabilities 258 00:17:15,560 --> 00:17:20,479 Speaker 2: there in that space as well. And then similarly in 259 00:17:20,520 --> 00:17:24,439 Speaker 2: the mining sector and in this region, we have a 260 00:17:24,480 --> 00:17:29,960 Speaker 2: tremendous amount of lithium minds, particularly down in South America 261 00:17:30,080 --> 00:17:34,520 Speaker 2: in the Southern Cone, and we provide similar industrial projects 262 00:17:34,560 --> 00:17:40,159 Speaker 2: capabilities to the main lithium miners as they build up 263 00:17:40,200 --> 00:17:43,639 Speaker 2: their mind sits, as they do the resupply for the 264 00:17:43,720 --> 00:17:48,240 Speaker 2: mind sits, and even in some cases moving the finished 265 00:17:48,359 --> 00:17:53,320 Speaker 2: lithium products. So just another example of different services that 266 00:17:53,680 --> 00:17:55,440 Speaker 2: were offeringly right. 267 00:17:55,840 --> 00:17:59,280 Speaker 1: And so the forwarding industry has been pretty crazy since 268 00:17:59,320 --> 00:18:02,439 Speaker 1: the pandemic. Not only have you seen you know, rates 269 00:18:02,440 --> 00:18:06,639 Speaker 1: go sky high, which also see margins expand margins have 270 00:18:06,800 --> 00:18:11,359 Speaker 1: been contracting. Can you talk about GHL forwardings margins and 271 00:18:11,760 --> 00:18:14,440 Speaker 1: kind of like where you guys expect them to go 272 00:18:15,200 --> 00:18:16,440 Speaker 1: maybe longer term. 273 00:18:16,840 --> 00:18:21,280 Speaker 2: Look, I think, as you said, you know, margins in 274 00:18:21,359 --> 00:18:25,760 Speaker 2: our business are very much a determinant of supply and 275 00:18:25,840 --> 00:18:29,200 Speaker 2: demand right forwarders are really in the middle of that 276 00:18:29,600 --> 00:18:32,800 Speaker 2: kind of supply demand curve that really drives up prices 277 00:18:32,840 --> 00:18:36,080 Speaker 2: when we've got major as we did with the pandemic, 278 00:18:36,119 --> 00:18:39,880 Speaker 2: a major capacity crunch and then you had major demand 279 00:18:39,960 --> 00:18:44,040 Speaker 2: spikes and that really drove pricing up as it relates 280 00:18:44,080 --> 00:18:47,359 Speaker 2: to margins. The way we view that is this is 281 00:18:47,480 --> 00:18:51,000 Speaker 2: really the essence of kind of what makes us unique 282 00:18:51,000 --> 00:18:53,159 Speaker 2: and what makes us different and why is it that 283 00:18:53,280 --> 00:18:56,800 Speaker 2: a customer would be willing to pay more for the 284 00:18:56,840 --> 00:19:00,719 Speaker 2: services that we offer. And there we think about how 285 00:19:00,760 --> 00:19:05,080 Speaker 2: do we integrate that full suite of services to our customers. 286 00:19:05,119 --> 00:19:09,440 Speaker 2: So we're talking about everything from purchase order management at 287 00:19:09,480 --> 00:19:16,359 Speaker 2: the origin origin consolidation, air ocean freight, LCL customs clearances 288 00:19:16,440 --> 00:19:21,959 Speaker 2: on the destination side, transloading over the road, trucking. So 289 00:19:22,000 --> 00:19:25,880 Speaker 2: we really focus on how do we support our customers 290 00:19:25,880 --> 00:19:27,800 Speaker 2: on an end to end and on a door to 291 00:19:27,880 --> 00:19:29,879 Speaker 2: door basis, and we think that if we do that 292 00:19:31,200 --> 00:19:36,360 Speaker 2: and we continue to deliver superior service, that we will 293 00:19:36,400 --> 00:19:39,480 Speaker 2: be able to continue to expand the margins over time, 294 00:19:39,600 --> 00:19:43,960 Speaker 2: regardless of what happens from a supply demand perspective. So 295 00:19:44,280 --> 00:19:48,520 Speaker 2: I think, without giving you specifics in terms of the margins, 296 00:19:48,280 --> 00:19:51,240 Speaker 2: that's how we that's how we think about it. It's 297 00:19:51,240 --> 00:19:55,160 Speaker 2: all about how you differentiate yourself and if you can 298 00:19:55,160 --> 00:19:58,000 Speaker 2: do that, then you should be able to expand your margins. 299 00:19:58,680 --> 00:20:02,200 Speaker 1: Yeah, and so we're talking about margins. Obviously technology comes 300 00:20:02,240 --> 00:20:07,399 Speaker 1: into play. You know, I guess buzzwords now are AI, 301 00:20:08,480 --> 00:20:10,800 Speaker 1: which used to be just computer learning. But you know, 302 00:20:10,880 --> 00:20:13,320 Speaker 1: now you say AII, you may get another turn on 303 00:20:13,359 --> 00:20:18,600 Speaker 1: your stock. So for for DHL, what are you guys 304 00:20:18,680 --> 00:20:21,720 Speaker 1: doing to make the people that you have more productive 305 00:20:23,160 --> 00:20:25,640 Speaker 1: from a day to day basis in the forwarding business? 306 00:20:26,119 --> 00:20:28,800 Speaker 2: I think that's a great question, Lee, because it's something 307 00:20:28,880 --> 00:20:32,960 Speaker 2: that we're tremendously focused on. And maybe later we talk 308 00:20:33,040 --> 00:20:36,639 Speaker 2: a little bit about sort of the digital forward or 309 00:20:36,720 --> 00:20:40,000 Speaker 2: landscape and how that has obviously changed, because I think 310 00:20:40,000 --> 00:20:42,880 Speaker 2: that that's interesting and that was something that we saw 311 00:20:42,960 --> 00:20:45,479 Speaker 2: out in in TPM. But a big part of that 312 00:20:45,640 --> 00:20:50,480 Speaker 2: is we really believe that one of the true differentiators 313 00:20:50,480 --> 00:20:53,080 Speaker 2: that we have are the people that we have on 314 00:20:53,119 --> 00:20:57,120 Speaker 2: our front line, right the expert forwarders that are serving 315 00:20:57,160 --> 00:21:00,600 Speaker 2: our customers every single day. And so one things that 316 00:21:00,640 --> 00:21:03,880 Speaker 2: I think about as much as I think about how 317 00:21:03,880 --> 00:21:07,440 Speaker 2: do we improve the experience of our customers, I equally 318 00:21:07,480 --> 00:21:11,520 Speaker 2: think about how do we improve the experience of our operators. 319 00:21:12,040 --> 00:21:15,440 Speaker 2: Twenty years ago, I ran one of our largest stations 320 00:21:15,480 --> 00:21:19,040 Speaker 2: in Los Angeles where I oversaw four hundred people, and 321 00:21:19,600 --> 00:21:23,360 Speaker 2: three hundred and fifty of those were frontline operators. Right. 322 00:21:23,400 --> 00:21:27,800 Speaker 2: So these are people that are servicing customers, processing documentation, 323 00:21:28,760 --> 00:21:31,760 Speaker 2: moving freight, and so I really have an appreciation for 324 00:21:31,840 --> 00:21:34,679 Speaker 2: what it means to make their life easy so that 325 00:21:34,720 --> 00:21:37,600 Speaker 2: they can spend more time with our customers. What we've 326 00:21:37,600 --> 00:21:41,879 Speaker 2: been doing about that is we now have one global 327 00:21:43,000 --> 00:21:48,320 Speaker 2: enterprise TMS system. I think this is pretty significant as 328 00:21:48,320 --> 00:21:52,040 Speaker 2: it relates to our business because it means that everyone 329 00:21:52,119 --> 00:21:55,639 Speaker 2: globally within DIT of Global forty, every operator is using 330 00:21:56,200 --> 00:22:01,680 Speaker 2: the same core TMS, executing the same processors, and has 331 00:22:02,440 --> 00:22:06,240 Speaker 2: visibility to the transaction because we talk about an import 332 00:22:06,280 --> 00:22:10,639 Speaker 2: and an export the moment that that transaction happens within 333 00:22:10,760 --> 00:22:13,720 Speaker 2: our operating system. So that is I think a really 334 00:22:13,800 --> 00:22:20,840 Speaker 2: powerful platform to have. Secondly, that operator is fully supported 335 00:22:21,000 --> 00:22:26,920 Speaker 2: by both service center processes. Right, so we have global 336 00:22:27,400 --> 00:22:32,480 Speaker 2: shared service centers where they are taking the non value 337 00:22:32,520 --> 00:22:38,040 Speaker 2: added activities where we still require human intervention, and those 338 00:22:38,119 --> 00:22:42,320 Speaker 2: processes are being managed in a service center environment so 339 00:22:42,400 --> 00:22:46,119 Speaker 2: that the operator again can focus on the higher val value. 340 00:22:46,160 --> 00:22:50,320 Speaker 2: Add and then in addition, we're bringing technology in, so 341 00:22:50,440 --> 00:22:57,680 Speaker 2: technology whether it is URPA or URPA technology to take 342 00:22:57,800 --> 00:23:02,040 Speaker 2: repetitive tasks again off the operator and have them happen 343 00:23:02,160 --> 00:23:07,640 Speaker 2: systemically or and this is where things start to come 344 00:23:07,680 --> 00:23:12,040 Speaker 2: in from a generative AI perspective. We're really starting to 345 00:23:12,160 --> 00:23:17,160 Speaker 2: think now about how can we use generative AI again 346 00:23:17,640 --> 00:23:21,040 Speaker 2: to improve the life of an operator. Good, good example, 347 00:23:21,080 --> 00:23:23,639 Speaker 2: Let me give you a simple example of that. Right, 348 00:23:23,720 --> 00:23:25,439 Speaker 2: One of the things we want our operators to do 349 00:23:25,480 --> 00:23:29,160 Speaker 2: is spend more time dealing with customers solving their most 350 00:23:29,200 --> 00:23:31,280 Speaker 2: complex problems. But we found that a lot of the 351 00:23:31,320 --> 00:23:36,280 Speaker 2: interactions that they were having was around where is my shipment? 352 00:23:36,680 --> 00:23:40,880 Speaker 2: You know, track and trace my shipment. We have an 353 00:23:40,920 --> 00:23:46,560 Speaker 2: industry leading online platform called my dhly, which now all 354 00:23:46,600 --> 00:23:50,640 Speaker 2: of our customers have access to they can utilize that platform. 355 00:23:51,040 --> 00:23:54,280 Speaker 2: But we went one step further. We've We've created a 356 00:23:55,240 --> 00:23:59,320 Speaker 2: chat bot. Her name is Ada, and our customers can 357 00:23:59,440 --> 00:24:02,440 Speaker 2: use that either in a mobile format or a web format. 358 00:24:02,680 --> 00:24:06,159 Speaker 2: They can simply chat with a number with ieiter and 359 00:24:06,200 --> 00:24:08,440 Speaker 2: put in the house bill or the ocean bill of 360 00:24:08,520 --> 00:24:11,680 Speaker 2: lady or the domestic tracking number, and they will have 361 00:24:11,880 --> 00:24:14,560 Speaker 2: all of the details as it relates to that shipment. 362 00:24:15,119 --> 00:24:17,440 Speaker 2: Now where the generative AI can come in here is 363 00:24:17,760 --> 00:24:23,080 Speaker 2: imagine if that shipment is stuck in customs in Peru, 364 00:24:23,359 --> 00:24:27,840 Speaker 2: and now the customer can ask Ida, okay, I what 365 00:24:28,040 --> 00:24:33,240 Speaker 2: is the typical what is it that Peruvian customs is 366 00:24:33,280 --> 00:24:36,840 Speaker 2: looking for? What documentation are they looking for? And then Aida, 367 00:24:37,560 --> 00:24:41,359 Speaker 2: using our generative AI, can provide a list of okay, 368 00:24:41,359 --> 00:24:44,280 Speaker 2: here's exactly what they're looking for, and then take that 369 00:24:44,359 --> 00:24:46,480 Speaker 2: even further, the customer can say, well how long is 370 00:24:46,480 --> 00:24:49,399 Speaker 2: this likely to take? Is this a one day delay, 371 00:24:49,520 --> 00:24:53,360 Speaker 2: two day delay, two hour delay. That way we can 372 00:24:53,880 --> 00:24:58,439 Speaker 2: get that information again out of our operator's hands and 373 00:24:58,680 --> 00:25:03,960 Speaker 2: use technology to obviously also empower the customers. So this 374 00:25:04,080 --> 00:25:08,000 Speaker 2: is just a small, small example, but you know, ultimately, 375 00:25:08,040 --> 00:25:09,560 Speaker 2: like I said, we think a lot about how do 376 00:25:09,600 --> 00:25:13,440 Speaker 2: we improve the experience of our operators and technology plays 377 00:25:13,640 --> 00:25:14,679 Speaker 2: a big role in that. 378 00:25:15,160 --> 00:25:19,600 Speaker 1: You know, the the AI and the TMS that you mentioned. 379 00:25:19,840 --> 00:25:22,119 Speaker 1: Are these things that you guys are building in house 380 00:25:22,280 --> 00:25:26,240 Speaker 1: or are you taking stuff off the shelf working with consultants. 381 00:25:26,680 --> 00:25:30,399 Speaker 1: How are you going about the technology development investments? 382 00:25:30,760 --> 00:25:36,040 Speaker 2: Yeah, for the TMS, we partnered with a global TMS 383 00:25:36,200 --> 00:25:40,720 Speaker 2: provider within the transportation space. We've committed to invest multiple 384 00:25:40,760 --> 00:25:44,960 Speaker 2: billions over the coming decades towards digitalization, and a lot 385 00:25:45,000 --> 00:25:48,000 Speaker 2: of that is being built in house. So I talk 386 00:25:48,040 --> 00:25:52,440 Speaker 2: about generative AI. We have our own internal version of. 387 00:25:52,440 --> 00:25:56,360 Speaker 3: Chat GPT, our own our own gen AI hub that 388 00:25:55,880 --> 00:26:00,160 Speaker 3: we that we're building as an example, Our r PA technology, 389 00:26:00,560 --> 00:26:05,480 Speaker 3: our data lake technology, analytics technology, all of. 390 00:26:05,400 --> 00:26:08,399 Speaker 2: That is developed and built in house. 391 00:26:09,080 --> 00:26:11,560 Speaker 1: All right, great, you know you did. You were mentioning 392 00:26:11,880 --> 00:26:18,080 Speaker 1: the digital forwarders earlier. You know, we view whether it's 393 00:26:18,080 --> 00:26:21,919 Speaker 1: a fowarder or a broker. You know, everyone's coming to 394 00:26:22,000 --> 00:26:25,439 Speaker 1: the middle. The digital people are coming closer to the 395 00:26:25,520 --> 00:26:30,240 Speaker 1: legacy forwarders, and legacy forwarders are coming closer to the 396 00:26:30,280 --> 00:26:34,000 Speaker 1: digital forwarders. Is that how you see it? Or do 397 00:26:34,080 --> 00:26:38,040 Speaker 1: you see a big wash out of the legacy and 398 00:26:38,080 --> 00:26:42,040 Speaker 1: the digital forwarders that aren't kind of moving closer to 399 00:26:42,080 --> 00:26:43,000 Speaker 1: the center if you will. 400 00:26:43,520 --> 00:26:46,879 Speaker 2: Yeah, Look, there has obviously been a tremendous amount of 401 00:26:46,920 --> 00:26:50,359 Speaker 2: capital over the past decade that has flown into the 402 00:26:50,480 --> 00:26:55,680 Speaker 2: digital forward or space. I think it's it's clear that 403 00:26:55,680 --> 00:27:00,600 Speaker 2: that was at some point the market was quite froth there. 404 00:27:00,680 --> 00:27:06,560 Speaker 2: Let me let me use that that term and TPM 405 00:27:06,720 --> 00:27:08,520 Speaker 2: is a good example. You know, a couple of years ago, 406 00:27:08,560 --> 00:27:14,160 Speaker 2: there's tremendous focus on sort of the digital forwarder as 407 00:27:14,359 --> 00:27:20,160 Speaker 2: the savior within the global industry, and that that quite 408 00:27:20,160 --> 00:27:22,520 Speaker 2: frankly has not happened. In fact, there's there's there are 409 00:27:22,560 --> 00:27:28,600 Speaker 2: digital forwarders out there that obviously are battling for for survival. 410 00:27:28,680 --> 00:27:31,840 Speaker 2: Right They've had tremendous capital and cash injections and now 411 00:27:32,840 --> 00:27:37,000 Speaker 2: they need to generate returns on that capital. And I 412 00:27:37,040 --> 00:27:43,240 Speaker 2: think one thing that was underestimated was the value of 413 00:27:44,000 --> 00:27:50,080 Speaker 2: the physical network and ultimately the value of the operator 414 00:27:50,160 --> 00:27:55,720 Speaker 2: on the front line to make informed logistics decisions on 415 00:27:55,800 --> 00:28:00,520 Speaker 2: behalf of importers and exporters. And what we have been 416 00:28:00,560 --> 00:28:05,480 Speaker 2: doing over the that decade is building our digital capability, 417 00:28:05,520 --> 00:28:08,359 Speaker 2: the my dh I capability that I that I mentioned 418 00:28:08,400 --> 00:28:12,600 Speaker 2: and when we now benchmarkd that against both digital forward 419 00:28:12,680 --> 00:28:16,480 Speaker 2: or platforms plus traditional forward A platforms, we feel very 420 00:28:17,000 --> 00:28:19,280 Speaker 2: confident with with where we are and we get great 421 00:28:19,280 --> 00:28:23,560 Speaker 2: feedback from our customers. But we've now you know, we've 422 00:28:23,600 --> 00:28:27,320 Speaker 2: coupled that with with the expertise and with the network 423 00:28:27,680 --> 00:28:32,440 Speaker 2: that you have, and so I think I see more 424 00:28:32,480 --> 00:28:37,200 Speaker 2: and more shakeout, quite frankly happening on the true digital 425 00:28:37,280 --> 00:28:41,480 Speaker 2: forward side. I think if if they are not investing 426 00:28:41,600 --> 00:28:45,600 Speaker 2: in you know, people, process and some infrastructure to develop 427 00:28:45,600 --> 00:28:49,040 Speaker 2: a network, uh, and they want to be a pure 428 00:28:49,760 --> 00:28:53,840 Speaker 2: let's say software play, I think that's a that that's 429 00:28:53,880 --> 00:28:58,680 Speaker 2: a very challenging marketplace to be in, quite frankly. Right. 430 00:28:58,720 --> 00:29:03,080 Speaker 1: And you mentioned the value physical physical network, and obviously 431 00:29:03,200 --> 00:29:05,920 Speaker 1: DHL has a as a as an organization has a 432 00:29:06,040 --> 00:29:11,160 Speaker 1: huge physical network, whether that's an air freight fleet, trucks, warehouses. 433 00:29:11,680 --> 00:29:15,280 Speaker 1: So what does that physical network do for the forwarding 434 00:29:15,360 --> 00:29:17,959 Speaker 1: business or shall I say, what does the forwarding business 435 00:29:18,000 --> 00:29:21,040 Speaker 1: do for that physical network? What's the relationship there? 436 00:29:21,400 --> 00:29:24,440 Speaker 2: Yeah, I think on the I mean a very good example, 437 00:29:24,520 --> 00:29:30,240 Speaker 2: you mentioned the significant air fleet that we have within DHL, 438 00:29:30,560 --> 00:29:36,120 Speaker 2: that that fleet supports the DHL Express business of the 439 00:29:36,200 --> 00:29:41,040 Speaker 2: very true the TDI, the time sensitive parcel and package business. 440 00:29:41,520 --> 00:29:45,560 Speaker 2: It also supports our global e commerce business and critically 441 00:29:45,800 --> 00:29:49,120 Speaker 2: it supports the global forwarding business. So this is really 442 00:29:49,200 --> 00:29:53,920 Speaker 2: our own in house carrier that we have access to 443 00:29:54,040 --> 00:29:58,160 Speaker 2: capacity of and quite frankly that we help them kind 444 00:29:58,200 --> 00:30:01,720 Speaker 2: of shape the network. So we will work closely with 445 00:30:01,920 --> 00:30:06,440 Speaker 2: them when they look at route planning, when they look 446 00:30:06,480 --> 00:30:09,880 Speaker 2: at fleet planning and say, hey, we're thinking about putting 447 00:30:09,920 --> 00:30:16,160 Speaker 2: a flat on as an example, from Miami down to Sapallo. 448 00:30:15,840 --> 00:30:18,760 Speaker 2: What are you guys seeing in terms of freight flows 449 00:30:19,280 --> 00:30:22,920 Speaker 2: and how much capacity would you like to take on 450 00:30:23,880 --> 00:30:28,040 Speaker 2: that rotation. So I think there's a very close relationship 451 00:30:28,080 --> 00:30:32,440 Speaker 2: that we have that ultimately gives us another advantage in 452 00:30:32,440 --> 00:30:35,840 Speaker 2: the marketplace because not only do we partner with the 453 00:30:37,080 --> 00:30:41,680 Speaker 2: or cargo operators, not only do we have great partnerships 454 00:30:41,720 --> 00:30:45,479 Speaker 2: with the passenger fleets moving cargo on the belly, but 455 00:30:45,520 --> 00:30:49,040 Speaker 2: we have our own airline that we can use that 456 00:30:49,120 --> 00:30:53,520 Speaker 2: we can really leverage and strengthen that network. So in 457 00:30:53,600 --> 00:30:57,080 Speaker 2: terms of the value of the forwarding business to that 458 00:30:57,960 --> 00:31:02,280 Speaker 2: network and that infrastructure, one of the key values is 459 00:31:02,480 --> 00:31:07,720 Speaker 2: in is in reliability and continuity of the demand that 460 00:31:07,760 --> 00:31:10,520 Speaker 2: we we give to it. When you think about, you know, 461 00:31:11,400 --> 00:31:14,160 Speaker 2: running a network or or running a fleet of assets, 462 00:31:14,160 --> 00:31:17,520 Speaker 2: if you can have continuity of demand and that's uh, 463 00:31:17,680 --> 00:31:20,040 Speaker 2: I think that's very valuable and that's that's what we bring. 464 00:31:20,080 --> 00:31:25,120 Speaker 2: We can bring reliable demand into that network and and uh, 465 00:31:25,160 --> 00:31:26,960 Speaker 2: it's it's great for our customers as well. 466 00:31:27,960 --> 00:31:28,200 Speaker 3: Yeah. 467 00:31:28,240 --> 00:31:31,480 Speaker 1: And so you know you mentioned the you know earlier, 468 00:31:31,760 --> 00:31:34,720 Speaker 1: these kind of digital forwarders and you know, the ones 469 00:31:34,720 --> 00:31:40,840 Speaker 1: that aren't offering any any sort of people processes or 470 00:31:40,880 --> 00:31:43,280 Speaker 1: physical networks. You know, they might be in trouble. Do 471 00:31:43,280 --> 00:31:46,600 Speaker 1: you see a lot of consolidation, uh in the forwarding industry? 472 00:31:46,720 --> 00:31:49,360 Speaker 1: And I know ones put them up for sale as 473 00:31:49,360 --> 00:31:52,960 Speaker 1: a dB shanker, Uh, you know is out there kind 474 00:31:52,960 --> 00:31:55,520 Speaker 1: of shopping itself. So you know where do you see 475 00:31:55,520 --> 00:31:58,160 Speaker 1: consolidation in the forwarding industry? 476 00:31:58,520 --> 00:31:58,840 Speaker 3: Uh? 477 00:31:58,960 --> 00:31:59,960 Speaker 1: In the coming years. 478 00:32:00,200 --> 00:32:00,440 Speaker 3: Yeah. 479 00:32:01,200 --> 00:32:04,360 Speaker 2: Look, I think there will continue to be consolidation. The 480 00:32:04,440 --> 00:32:08,400 Speaker 2: industry is still highly fragmented when you when you look 481 00:32:08,440 --> 00:32:12,920 Speaker 2: at it relative to other sectors or other industries. And 482 00:32:13,200 --> 00:32:15,680 Speaker 2: right now you have a little bit sort of bifurcation 483 00:32:15,840 --> 00:32:21,200 Speaker 2: happening between a few of the larger players and obviously 484 00:32:21,240 --> 00:32:24,840 Speaker 2: the dB shankers is acquisitions kind of a part of that. 485 00:32:25,920 --> 00:32:30,040 Speaker 2: And then you have a tremendously long tail of either 486 00:32:30,320 --> 00:32:34,520 Speaker 2: niche players of what we would call small local heroes 487 00:32:34,560 --> 00:32:39,400 Speaker 2: in a market. And I think as a result of 488 00:32:39,440 --> 00:32:43,920 Speaker 2: that industry structure, I think that you're going to continue 489 00:32:43,960 --> 00:32:49,760 Speaker 2: to see consolidation take place for us, And obviously we 490 00:32:50,120 --> 00:32:53,840 Speaker 2: went public here recently that we are not part of 491 00:32:53,880 --> 00:32:58,240 Speaker 2: the process for for for dB Shanker for for reasons 492 00:32:58,280 --> 00:33:02,320 Speaker 2: that we're for reasons was stated. But the if you 493 00:33:02,400 --> 00:33:06,720 Speaker 2: look at prior to that, the acquisition that we made 494 00:33:06,760 --> 00:33:11,960 Speaker 2: of Hillebrand, which is the market leading global logistics provider 495 00:33:12,000 --> 00:33:15,080 Speaker 2: in the beer, wine and spirits market, that was a 496 00:33:15,120 --> 00:33:20,920 Speaker 2: great acquisition into a growing niche sector which added real 497 00:33:21,640 --> 00:33:25,640 Speaker 2: capabilities that we could then leverage within our network and 498 00:33:26,040 --> 00:33:30,480 Speaker 2: integrate seamlessly. So that's the kind of deal that we 499 00:33:30,600 --> 00:33:35,200 Speaker 2: look for, and so across that highly fragmented industry that 500 00:33:35,280 --> 00:33:40,080 Speaker 2: I mentioned, you know, across the many countries globally that 501 00:33:40,120 --> 00:33:43,440 Speaker 2: we had that we operate in, where we see those 502 00:33:43,520 --> 00:33:47,479 Speaker 2: kind of deals where there is real value add you know, 503 00:33:47,600 --> 00:33:52,680 Speaker 2: where it's a niche sector that talked about expanding margins before, 504 00:33:53,040 --> 00:33:56,560 Speaker 2: where we can further use that to expand our margins, 505 00:33:56,880 --> 00:33:59,840 Speaker 2: and where we see a real ease of integration into 506 00:33:59,880 --> 00:34:03,520 Speaker 2: our network. I think that's the kind of deal that 507 00:34:03,720 --> 00:34:05,200 Speaker 2: we will get excited about. 508 00:34:06,480 --> 00:34:09,080 Speaker 1: Are there verticals out there that are kind of deemed 509 00:34:09,120 --> 00:34:14,359 Speaker 1: higher growth, not just for DHL. But for forwarding in general. 510 00:34:14,760 --> 00:34:18,040 Speaker 2: Yeah, I think the way we think about also the 511 00:34:18,120 --> 00:34:24,800 Speaker 2: attractiveness of verticals here within the region life sciences and healthcare. 512 00:34:24,840 --> 00:34:28,720 Speaker 2: The pharmaceutical sector is a is a really attractive sector 513 00:34:28,840 --> 00:34:32,239 Speaker 2: for us. It's a sector that over the past you know, 514 00:34:32,360 --> 00:34:37,200 Speaker 2: two decades, we've made significant investments in in terms of infrastructure, 515 00:34:37,239 --> 00:34:41,319 Speaker 2: in terms of people, process technology that we continue to 516 00:34:41,360 --> 00:34:46,280 Speaker 2: make investments in. A good example, we recently opened a 517 00:34:46,360 --> 00:34:50,920 Speaker 2: state of the art coal chain facility in Raleigh, Durham. 518 00:34:51,840 --> 00:34:58,680 Speaker 2: We have expanded out col chain capabilities in Chicago and 519 00:34:59,040 --> 00:35:05,799 Speaker 2: h and Miami. We are opening a new operation in 520 00:35:06,080 --> 00:35:09,160 Speaker 2: costat Eca which will give us capabilities also to serve 521 00:35:09,160 --> 00:35:14,920 Speaker 2: in the medical devices our segments. So life sciences healthcare 522 00:35:14,960 --> 00:35:19,279 Speaker 2: continues to be a real attractive sector for us that 523 00:35:19,320 --> 00:35:23,120 Speaker 2: we're investing in and that we continue to grow. In 524 00:35:23,160 --> 00:35:27,400 Speaker 2: the technology space, we've always had a really strong footprint 525 00:35:27,880 --> 00:35:31,840 Speaker 2: in tech, whether it's the consumer tech or other sub 526 00:35:31,880 --> 00:35:35,640 Speaker 2: sectors there. What we're really excited about now. I mentioned 527 00:35:35,719 --> 00:35:40,600 Speaker 2: the semiconductor sector vertical as it relates to all the 528 00:35:40,640 --> 00:35:44,800 Speaker 2: investments that's happening are here in the US and also 529 00:35:44,880 --> 00:35:49,760 Speaker 2: in Europe. Quite frankly as well, they're that ecosystem around 530 00:35:49,840 --> 00:35:55,520 Speaker 2: semicon or the capital equipment or all the construction logistics. 531 00:35:55,920 --> 00:35:59,560 Speaker 2: That's a sector that we're very much focused on. And 532 00:35:59,640 --> 00:36:04,080 Speaker 2: then I would add here the automotive sector automotively has 533 00:36:04,160 --> 00:36:13,400 Speaker 2: always been a major global logistics user, also a major 534 00:36:13,760 --> 00:36:16,360 Speaker 2: a user of global air freight, a little bit of 535 00:36:16,400 --> 00:36:20,719 Speaker 2: a barometer as well, obviously in the auto sector. Now 536 00:36:20,800 --> 00:36:27,200 Speaker 2: with the focus on EV, that's a marketplace that we 537 00:36:27,320 --> 00:36:30,920 Speaker 2: are heavily investing in in terms of the capabilities not 538 00:36:31,120 --> 00:36:35,640 Speaker 2: just for the auto manufacturers themselves, but also on the 539 00:36:36,440 --> 00:36:42,480 Speaker 2: battery logistics and battery warehousing and EEV capabilities there. So 540 00:36:42,680 --> 00:36:46,120 Speaker 2: that they'd be three verticals that I'd say are pretty 541 00:36:46,200 --> 00:36:50,000 Speaker 2: exciting for US and where we continue to make big investments. 542 00:36:50,480 --> 00:36:52,840 Speaker 1: Right, And you mentioned the automotive industry, and before we 543 00:36:52,880 --> 00:36:54,400 Speaker 1: wrap up, you know, I really want to hear your 544 00:36:54,440 --> 00:36:57,040 Speaker 1: thoughts about you know, when you think of automotives, you 545 00:36:57,040 --> 00:36:59,440 Speaker 1: obviously think of a near shoring. What's going on in 546 00:36:59,440 --> 00:37:03,160 Speaker 1: Mexico generally speaking, what are you guys seeing south of 547 00:37:03,239 --> 00:37:06,800 Speaker 1: the US border in terms of supply the changes in 548 00:37:06,840 --> 00:37:07,720 Speaker 1: supply chains. 549 00:37:08,239 --> 00:37:11,200 Speaker 2: Yeah, Look, I think it was pretty telling that the 550 00:37:12,360 --> 00:37:18,360 Speaker 2: recent statistic that Mexico, after twenty years of being number 551 00:37:18,400 --> 00:37:21,760 Speaker 2: two to China in terms of exports to the United States, 552 00:37:21,800 --> 00:37:26,759 Speaker 2: took the number one spot here again. And so I 553 00:37:26,800 --> 00:37:32,239 Speaker 2: think we see a tremendous opportunity here in terms of 554 00:37:32,280 --> 00:37:36,200 Speaker 2: the trade between Mexico and the US and also Canada 555 00:37:36,239 --> 00:37:39,440 Speaker 2: as well. Here. Quite frankly, I think it's important to 556 00:37:39,480 --> 00:37:43,040 Speaker 2: note that, you know, some of that Chinese trade is 557 00:37:43,080 --> 00:37:46,320 Speaker 2: now coming through Mexico. Let's be honest as well. Is 558 00:37:46,400 --> 00:37:51,600 Speaker 2: that trading block that is kind of forming there, so 559 00:37:51,680 --> 00:37:55,120 Speaker 2: to speak, But there has I think there's been not 560 00:37:55,360 --> 00:37:58,960 Speaker 2: just within the last year, but within Our data shows 561 00:37:59,000 --> 00:38:04,200 Speaker 2: that over the last few years there has been North 562 00:38:04,239 --> 00:38:08,520 Speaker 2: America as a region is the one region where there 563 00:38:08,600 --> 00:38:13,120 Speaker 2: has really been a shift from a regionalization perspective. Right. 564 00:38:13,400 --> 00:38:18,600 Speaker 2: We just published last week our DHL Connectedness Index, which 565 00:38:18,719 --> 00:38:23,080 Speaker 2: in general shows that global connectedness set a record high 566 00:38:23,560 --> 00:38:25,960 Speaker 2: in twenty twenty two and remain close to that in 567 00:38:26,040 --> 00:38:30,280 Speaker 2: twenty twenty three. So globalization is still very much alive. 568 00:38:30,360 --> 00:38:33,840 Speaker 2: And well, right, there's de risking that's happening between China 569 00:38:33,880 --> 00:38:38,440 Speaker 2: and the US, but I think, quite frankly, that's not 570 00:38:38,520 --> 00:38:41,880 Speaker 2: necessarily a bad thing because I think the trade flows 571 00:38:41,960 --> 00:38:48,080 Speaker 2: between those two companies were disproportionately large for the previous decades. 572 00:38:48,160 --> 00:38:53,520 Speaker 2: So some rebalancing, some de risking there I think is good, 573 00:38:53,640 --> 00:38:56,520 Speaker 2: and Mexico from our perspective, is going to be one 574 00:38:56,520 --> 00:39:02,080 Speaker 2: of the real beneficiaries of that. And we're working very 575 00:39:02,120 --> 00:39:06,040 Speaker 2: closely and investing in Mexico in those sectors that I mentioned, 576 00:39:06,040 --> 00:39:12,320 Speaker 2: so life sciences, technology, also within the automotive space, where 577 00:39:12,760 --> 00:39:16,520 Speaker 2: where they are obviously very capable from a supply and 578 00:39:16,560 --> 00:39:19,520 Speaker 2: a supply based perspective. So we see a lot of 579 00:39:19,560 --> 00:39:21,920 Speaker 2: opportunity here in Mexico. 580 00:39:22,600 --> 00:39:26,520 Speaker 1: Great. So you've been with dhl in when I read 581 00:39:26,840 --> 00:39:29,799 Speaker 1: your bios since it was it two thousand and two. 582 00:39:31,200 --> 00:39:33,160 Speaker 1: So how did you get into transports? Did you just 583 00:39:33,280 --> 00:39:35,680 Speaker 1: answer an ad in the paper and then you kind 584 00:39:35,680 --> 00:39:38,359 Speaker 1: of stepped into it or how did you get into transportation? 585 00:39:38,960 --> 00:39:43,600 Speaker 2: You know, it was one of those very serendipitous moments. 586 00:39:43,640 --> 00:39:46,239 Speaker 2: It was definitely not It was a little more strategic 587 00:39:46,280 --> 00:39:50,920 Speaker 2: than what you've described, but not highly a highly strategic. 588 00:39:51,000 --> 00:39:54,560 Speaker 2: You know, my background here as a chemical engineer, I 589 00:39:54,640 --> 00:39:59,800 Speaker 2: had worked in mind sights, I'd worked at oil refineries, 590 00:40:00,040 --> 00:40:04,359 Speaker 2: and I realized that I was a little more sort 591 00:40:04,360 --> 00:40:08,680 Speaker 2: of a people person and didn't didn't enjoy being kind 592 00:40:08,680 --> 00:40:15,480 Speaker 2: of behind a computer programming a heat exchanger as an example. 593 00:40:15,480 --> 00:40:17,680 Speaker 2: I much rather would be out on the mind talking 594 00:40:17,760 --> 00:40:23,640 Speaker 2: to people. And I was just finishing my final year 595 00:40:23,800 --> 00:40:29,799 Speaker 2: in Boston for my MBA and a headhunter that was 596 00:40:29,840 --> 00:40:33,920 Speaker 2: working on behalf of Excel at the time MSA SXL 597 00:40:34,600 --> 00:40:37,120 Speaker 2: reached out and just said, hey, look, there's this guy 598 00:40:37,160 --> 00:40:39,880 Speaker 2: I want you to speak to. His name is Mick Fountain. 599 00:40:40,800 --> 00:40:45,920 Speaker 2: He was the CEO of Excel's forwarding division at the time, 600 00:40:47,360 --> 00:40:51,040 Speaker 2: based in San Francisco, and I flew out to meet Mick, 601 00:40:51,120 --> 00:40:55,520 Speaker 2: and Mick was was really a pioneer within the industry 602 00:40:55,560 --> 00:40:58,719 Speaker 2: and was a tremendous mentor for me, someone that did 603 00:40:58,719 --> 00:41:03,440 Speaker 2: not have, you know, a significant higher education college degree, 604 00:41:04,800 --> 00:41:09,080 Speaker 2: work his way up from the dock, you know, loading 605 00:41:09,680 --> 00:41:13,920 Speaker 2: air containers in London Heathrow to becoming a board member 606 00:41:14,120 --> 00:41:17,480 Speaker 2: at an Excel and he and I really clicked and 607 00:41:17,560 --> 00:41:20,359 Speaker 2: it was then that I said, hey, look, I want 608 00:41:20,360 --> 00:41:22,200 Speaker 2: to work for this guy. So it was really more 609 00:41:22,239 --> 00:41:27,040 Speaker 2: about the person. And as I started to research logistics 610 00:41:27,120 --> 00:41:31,120 Speaker 2: at the time, I thought, hey, this is an industry 611 00:41:31,160 --> 00:41:34,680 Speaker 2: that has tremendous opportunity if you think about some of 612 00:41:34,680 --> 00:41:38,399 Speaker 2: the macro trends that have kind of played out over 613 00:41:38,440 --> 00:41:42,120 Speaker 2: the past two decades. I thought, you know what this is, 614 00:41:42,360 --> 00:41:44,600 Speaker 2: this is an industry that's worth having a as I say, 615 00:41:44,640 --> 00:41:47,359 Speaker 2: having a crack at. I still when I go back 616 00:41:47,400 --> 00:41:51,680 Speaker 2: to my reunions in Boston and people like my classmates 617 00:41:51,719 --> 00:41:53,880 Speaker 2: look at me like, what are you doing? You know, 618 00:41:54,360 --> 00:41:57,360 Speaker 2: who are you working for? And obviously the pandemic changed that, 619 00:41:57,480 --> 00:42:00,160 Speaker 2: and now they're calling me saying, Hey, I'm working for 620 00:42:00,160 --> 00:42:02,960 Speaker 2: a client that needs supply chain resiliency. Tell me, tell 621 00:42:02,960 --> 00:42:04,480 Speaker 2: me what that what that's all about? 622 00:42:04,920 --> 00:42:05,080 Speaker 3: Right? 623 00:42:05,840 --> 00:42:09,000 Speaker 2: But that's that's kind of how I got into the 624 00:42:09,120 --> 00:42:13,160 Speaker 2: into the business, and and what I was instantly attracted 625 00:42:13,200 --> 00:42:19,680 Speaker 2: to was the dynamic nature of this industry, the variability 626 00:42:19,800 --> 00:42:22,720 Speaker 2: that we deal with every day. It's all about problem 627 00:42:22,880 --> 00:42:28,040 Speaker 2: solving and that's probably where the engineering piece comes in. 628 00:42:28,200 --> 00:42:30,759 Speaker 2: And then it's all about dealing with people. And in 629 00:42:30,760 --> 00:42:34,440 Speaker 2: our business, it's a network, so it's international people and 630 00:42:34,480 --> 00:42:37,160 Speaker 2: that that just gets my energy going every day. 631 00:42:37,920 --> 00:42:39,960 Speaker 1: Well, that's great, Tim, And I think we're gonna we're 632 00:42:39,960 --> 00:42:42,600 Speaker 1: gonna wrap it up here. And I want to really 633 00:42:42,640 --> 00:42:46,200 Speaker 1: thank you for your time for coming on to the podcast. 634 00:42:46,160 --> 00:42:49,520 Speaker 2: My pleasure, Lee, thank you so much and uh wish 635 00:42:49,640 --> 00:42:50,560 Speaker 2: I have a great day. 636 00:42:50,760 --> 00:42:53,000 Speaker 1: You too, And I want to thank everyone for tuning 637 00:42:53,000 --> 00:42:55,359 Speaker 1: in and if you liked the episode, please subscribe and leave 638 00:42:55,400 --> 00:42:58,520 Speaker 1: a review. We've lined up a great number of guests 639 00:42:58,600 --> 00:43:01,200 Speaker 1: for the podcast, so check back to hear conversations with 640 00:43:01,280 --> 00:43:05,200 Speaker 1: C suited executives, shippers, regulators, and decision makers within the 641 00:43:05,200 --> 00:43:07,600 Speaker 1: freight markets. Also, if you have an idea for a 642 00:43:07,640 --> 00:43:10,120 Speaker 1: future episode, please hit me up on the Bloomberg terminal 643 00:43:10,400 --> 00:43:13,920 Speaker 1: or on Twitter at logistics Lee. Thanks everyone and take care.