DHL Express

DHL Express is part of Deutsche Post AG, a German-registered corporation with headquarters in Bonn, Germany. Under its Deutsche Post & DHL brands, this group provides a range of international services including parcel distribution, express delivery, supply chain management, freight transport and e-commerce solutions. In November 2023, the group is organized into the five following operating segments: Supply Chain, Global Forwarding & Freight, Express, eCommerce, and Post & Parcel Germany. Each of the divisions is managed independently and subdivided into business units, functions, and regions. This dashboard focuses on DHL’s Express division but also reviews the operational performance of the other three divisions to place the relationship between the Express group and the rest.

Figure 1 provides a current overview of the international scope and scale of DHL Express’ operations. Capitalizing on the increasing demand in global trade, DHL has launched new and expanded services in its flight network. These include a new dedicated flight route between Singapore and the United States via Central Japan International Airport, operated by Singapore Airlines. In Hong Kong, DHL has expanded its Central Asia Hub, and introduced two new flights from Hong Kong to Ho Chi Minh City, Vietnam, and Chengdu, China. Additionally, DHL Express has initiated a next-day delivery service from Hong Kong to the United States, ensuring shipments reach major U.S. business centers by 10:30 am the next day. This expansion and enhancement of services reflect DHL’s commitment to meeting the growing demands of global e-commerce and international express service.

Figure 1 – DHL Express Hubs and Focus Cities – 2022

DHL Express has a global network that spans over 220 countries and territories, providing services to 2.7 million customers and employs over 586,000 people. Its fleet of about 250 aircraft makes DHL one of the largest air carriers in the world. DHL has developed a network of airline alliances with 18 owned and partner operators that is very different from the single-operator business models of FedEx or UPS. In the past decade, DHL has expanded its own dedicated air operations by taking more direct control over freighter operations on high-demand routes supplying more reliable capacity and providing shorter delivery times. Its dedicated air freight fleet and over twenty partner airlines operate over 2,400 daily scheduled flights serving more than 500 airports across the world.

Figure 2 – DHL Express Airline Subsidiaries, Affiliates and Subcontractors

The DHL Express division continued its strong performance in 2022 and revenue increased by 14% to €27.6 Billion ($26 billion). The revenue growth was partly due to currency exchange, however, excluding that, the express division’s revenue grew by 9.6% YoY. The division’s EBIT decreased .5% to €4 billion ($3.8 billion). B2C express volumes dropped YoY due to economic instability but remained above the pre-pandemic levels. B2B volumes were also down in 2022 with a slowdown seen after the war in Ukraine began. Time-definite international express (TDI) saw a per-day revenue growth YoY even though the product volumes were down. Time-definite domestic (TDD) saw flat per-day revenue growth although volumes were down. Through the course of the year, DHL was able to maintain flexibility and adaptability in the economic uncertain times through their virtual business model. Express reported an EBIT margin of 14.6%.

Figure 3 shows DHL’s revenue distribution across its four divisions. Historically, the total revenue was almost evenly divided between the segments, but now, the PeP (Post – eCommerce – Parcel) represents only 17%, down from 29% in 2017. This is because DHL decided to split this into two divisions and created eCOmmerce Solutions as its own division. In 2019, DHL created a new segment called the new eCommerce Solutions which encompasses all international parcel delivery operations with core activities in Europe, some Asian countries, and the US. In the latest fiscal year, this accounted for about 6% of all DHL revenue in 2022.

Figure 3 – Deutsche Post DHL Revenue by Segment 2010 – 2022

The dynamic surge in package volumes intensified during the Christmas season, with capacity utilized at optimal levels and maintaining a high quality of service. As of 2023, the pandemic’s impact on DHL continues, with sustained high demand in B2B and B2C shipment volumes due to the persistent shift towards e-commerce. In particular, the U.S. B2B e-commerce market is expected to reach $1.8 trillion, comprising 17% of all B2B sales, demonstrating the significant and lasting changes in consumer and business buying behaviors.

Figure 4 illustrates the profit margin development by business division and it clearly shows how DHL Express leads this figure on a unit base although it shows a 2.4% decline for 2022. Since the years after the economic recession and DHL’s exit of the U.S. domestic market, the Express division has experienced a stronger performance than the other units. Also of note is the growth in the Global Freight Forwarding segment, seeing an increase to 7.6% in 2022 from 3.7% in 2020, equaling PeP and surpassing supply chain margins. The newly created eCommerce Solutions division was not included in this figure.

Figure 4 – Deutsche Post DHL Profit Margin (EBIT) by Business Segment 2006 – 2022

Figure 5 shows the revenue distribution of DHL Express by region since 2006. Following the withdrawal from the U.S. domestic market in January 2009, which primarily affected the Americas’ share up to 2010, the distribution of revenue across the regions has shown consistency. Europe has maintained the largest proportion of revenue throughout the period, while the Asia-Pacific region has consistently held the second-largest share. The Americas and MEA regions have had smaller shares, with the Americas experiencing a slight increase in its share of revenue by 2022. DHL continues to expand its European network, breaking ground on a new, sustainable European Innovation Center in Troisdorf, Germany, set for completion in April 2025. In the Americas, they have opened a $84.5 million hub in Atlanta, establishing direct connections among 19 U.S. Southeast cities and global markets, with plans to expand to Hong Kong, Mexico, the UK, and Puerto Rico. Additionally, DHL Supply Chain announced a €500 million investment through 2028 in Latin America, enhancing logistics capabilities in various sectors and inaugurating a new Center of Excellence for Electric Vehicles in Mexico. The Middle East remains the smallest region, and DHL’s Africa eShop, launched in 2019 to connect retailers in the United Kingdom and the US with buyers in Africa, closed down at the end of October 2021. Prior to its closure, the service operated in 34 African countries, facilitating purchases from 200 European and US-based retailers. The closure was due to the high cost and complexity of running the service, combined with insufficient demand and increased competition from other online retailers like Jumia.

Within the Express unit, in 2022 about 77% of total revenue came from Europe (41% share) and Asia Pacific (36% share) with the Middle East and Africa (MEA) region and the Americas representing 6% and 22% respectively.

DHL Express’s core product is the international time-definite shipments (TDI) which provides services with a pre-defined delivery time. The second main product is called time-definite domestic (TDD) and provides domestic services within a country or territory. TDD revenues remain about a tenth of TDI revenues due to lower shipment volumes and a much lower revenue per shipment. TDD is also generally a ground product. Most of the freight capacity owned or purchased by DHL is used for TDI and if something remains, it is sold to other air freight operators and customers with DHL Global Forwarding being the largest buyer of this remaining capacity. In 2023, DHL Express’s revenue in the Europe area declined, with a 12.5 percent decrease in the second quarter to EUR 6.1 billion, largely due to negative currency impacts and lower fuel surcharges. The third quarter continued this trend with a further 6.4 percent revenue decrease, excluding currency effects and fuel surcharges, and an overall year-over-year decline of 44.0 percent.

Figure 5 – DHL Express Revenues by Region 2010 – 2022

Figure 7 displays the shipment volume development for the TDI and TDD product lines. The TDI shipments experienced a slight reduction, impacting DHL Express’s revenue growth which still increased due to effective pricing and fuel surcharges. The chart indicates that while there was overall growth, the specific volumes for TDD and TDI reflect these nuanced changes. Deutsche Post DHL Group’s financial performance, with increased revenues and EBIT, shows resilience and successful adaptation within its TDI and TDD services amidst a dynamic market.

Figure 6 – DHL Express Time Definite International and Domestic Yields 2007 – 2022

Figure 7 – DHL Express Shipment Volume by Product Development 2007 – 2022

The drop of more than 50% in TDD shipment counts in 2014 reflects the shift of operations in several countries, from the Express unit to the PeP or Global Forwarding units. In the recent years, Blue Dart in India and the domestic express business in the Netherlands, Luxembourg, Belgium, Spain, Portugal and Poland were reassigned from Express to the PeP division while the Sky Courier subsidiary in the United States was transferred to the Global Forwarding/Freight division. DHL ended all domestic operations in China, Canada, Australia and New Zealand between 2011 and 2013; and some or all domestic operations were ended in prior years in the United Kingdom and France.