DHL’s sports sponsorships are a major part of our marketing strategy: Sandeep Juneja

The leading international express service provider in the world, DHL Express continued its partnership with Mumbai Indians as the Principal Sponsor and the Official Logistics Partner for the fourth year in IPL 2024. It has also partnered with Mumbai Indians Women’s Team and MI Cape Town in 2024, boosting its brand presence.

In conversation with Adgully, Sandeep Juneja, VP – Commercial, DHL Express India, shares the reason behind the cricket franchise sponsorship of DHLE and the association with Mumbai Indians for emphasizing the ‘Team behind the team’ ideology, the steps taken by DHLE towards greener logistics (in India and globally), GoGreen Plus (sustainable digital and paperless, aviation fuel footprint), about the association with Coldplay and Formula E, the perspective on the sector with regards to viable logistics and any challenges/obstacles that are required to be addressed towards enabling it. He also shed light on the trends shaping the logistics, and transportation industry currently and the challenges and opportunities in the same.

What is the reason behind the cricket franchise sponsorship of DHLE and the association with Mumbai Indians to emphasize the ‘Team behind the team’ ideology? What are the expectations of the association?

I am sure you remember Shah Rukh Khan’s monologue in ‘Chak de India!’ In his speech, he detailed how 70 minutes is enough to change a hockey player’s life; and how those 70 minutes – whether they win or lose - will remain with them for the rest of their lives. It gives me goosebumps every time I think about it.

That is what following a sport does to you! The sheer adrenaline of emotion, drama, unscripted fun, and team spirit keeps you on the edge of your seat, wanting more. It brings people together – acquaintances, even strangers become friends when they support the same team. That is why, at DHL, our sports sponsorships are a major part of our marketing strategy. Apart from heightening brand visibility and helping us reach a wider target audience, it also speaks about our ability to “Connecting People, and Improving Lives”.

While across the globe, our sponsorships vary across motorsport, rugby, football, and even eSports, investing in cricket in India, was a no-brainer. Cricket in India isn’t a sport, it is a religion; and if cricket is a religion, then IPL is the festival that brings not only the nation but countries across the globe together. Our sponsorship with the Mumbai Indians reflects a partnership based on shared values – speed, passion, a can-do attitude, and most importantly, teamwork. Teamwork is key, whether in sports or business. Just as the support team rallies behind the playing 11 in a match; our core role as DHL is to rally behind our customers in managing their supply chains & thus the concept of ‘Team behind the Team’.

What are the steps undertaken by DHLE towards greener logistics (in India and globally), GoGreen Plus (sustainable digital and paperless, aviation fuel footprint), and the association with Coldplay and Formula E?

The DHL Group’s mission statement is ‘Excellence. Simply Delivered,’ which should tell you a lot about where our priorities lie. With around 594,000 employees in 220 countries and territories, we are an essential driver of global trade, economic growth, and individual prosperity. Sustainability is our responsibility and is well embedded in our Strategy 2025.

Globally, DHL Express is setting ambitious emission reduction targets and investing heavily in green technologies across all modes of transport. We are committed to playing a leading role in decarbonizing the logistics industry. Therefore, we collaborate with the right partners for sustainable aviation fuels like e-fuels, exploring technologies like electric planes for short-haul routes, and piloting electric vehicles (EVs).

We have been EV pioneers since 2015. We have set the target to electrify 60% of last-mile vehicles globally and grow our sustainable fuel share in line-haul to more than 30% by 2030. With over 36,000 EVs currently operational worldwide, DHL Express India is also contributing to this figure with EVs operating from our Pune and Nasik service centers as well.

We are certifying our employees as GoGreen specialists and getting them involved in our environmental and climate protection activities. So far, we have planted over a million trees in India.  Since 2015, we have had nine LEED-certified facilities (including the Bangalore gateway, Delhi Automatic Shipment Sorting Hub, Mumbai country office, Bangalore, Ahmedabad, Noida, Faridabad, Rajkot, and Ludhiana). All of DHL Express India facilities are on LED, which leads to 85% less energy consumption as compared to conventional lights. Some DHL facilities are solar-powered, generating more than 1.2mn units of solar energy.

To maintain and operate sustainable technologies within our fleet, it is incredibly important to collaborate with the right partners, who are subject matter experts in this area. Our collaboration with Eviation, a Seattle-based global manufacturer of all-electric aircraft, is one such example of allowing the experts to be the experts. We have placed our order of up to 12 Alice e-cargo planes. This is the first-ever fully electric commuter plane from Eviation Aircraft. “Alice” successfully completed its maiden flight in September 2022.

Another key aspiration is to become the leader in sustainable aviation. To achieve this, DHL Group will increase the blend of SAF in its operations to at least 30 per cent by 2030.  At a global level, DHL Express has announced two of the largest ever sustainable aviation fuel deals with bp, World Energy, and Nestle amounting to more than 800 million litres. This brings us to another important area where we bring in the experts – Scope 3 emissions.

While most targets fall under Scope 1 and 2, Scope 3 emissions are indirect emissions throughout a company's value chain, including emissions from transportation and downstream distribution. Most importantly, Scope 3 emissions cover emissions produced by customers using the company’s products or those produced by suppliers making products that the company uses. Addressing Scope 3 emissions can be challenging as they often involve cooperation and coordination with suppliers, customers, and other stakeholders.

To extend the benefit of working towards targeted carbon neutrality to our customers, GoGreen Plus leverages the insetting methodology and reduces emissions within the logistics sector. This can be used for DHL customers’ own voluntary emission reporting and follows the Science Based Target Initiative (SBTi) philosophy. DHL’s GoGreen Plus targets the reduction of Scope 3 emissions associated with the journey of the shipment leveraging Sustainable Aviation Fuel (SAF). The GoGreen Plus service is also the only method available in the global express logistics industry that enables customers to utilize SAF to reduce emissions related to their shipments. To date, we have over 12,000 customers who have benefitted from this product in their journey towards sustainable logistics.

Sustainability is not only a good-to-have trend anymore. It is a key factor for customers when choosing their service partners. Take our association with Coldplay, Formula 1, and Formula E – apart from being a trusted provider of choice, our USP was the innovative green solution that we provide.

With Coldplay, we ensured sustainable operations by reducing freight emissions using advanced biofuels. We also deployed a fleet of electric vehicles as well as trucks powered by organic waste and offset carbon emissions across the rest of our supply chain. Moreover, our GoGreen Plus Service provided the band with innovative solutions to help minimize the environmental impacts of touring.

With Formula 1, we marked a significant milestone, completing 20 years as their official logistics partner. The partnership, the longest standing in the sport's history, has evolved to embrace green logistics, significantly contributing to Formula 1’s Net Zero goal by 2030. Our collaboration with Formula 1 is a shared journey towards a greener, more efficient future. With initiatives like the introduction of a sustainable motorhome and the use of fuel-efficient aircraft, we are setting new standards in eco-friendly logistics. This year, we have more than doubled our fleet of biofuel-powered trucks to a total of 37 trucks, achieving an 83% reduction in carbon emissions per truck, exemplifying our commitment to sustainable practices.

Our partnership with Formula E goes beyond logistics. DHL is proud to be part of Formula E’s mission to inspire and engage a global audience on sustainability, as well as accelerate positive change and give back to the local community. Together, we have worked on initiatives including tree planting, community engagement, and promoting gender equality through FIA Girls on Track. For example, we started using biofuels for all our road freight during Formula E testing in Valencia in 2020.

It is time to focus on creating a better environment and reducing CO₂ emissions to safeguard our planet for future generations. I mentioned earlier that we have around 594,000 employees across 220 countries and territories. We are proud to be driving sustainability as a company, but we look forward to seeing more customers also become active contributors towards this cause.

What is the perspective on the sector about viable logistics and any challenges/ obstacles that are required to be addressed towards enabling it?

The potential for innovation is immense. At DHL Express, we are doing everything in our power to build viable and sustainable logistics as mentioned earlier. This is not only to achieve key business goals but to truly contribute towards creating a better future for the next generation.  If we are looking at it from a business standpoint, several reports that studied consumer perceptions on sustainability markers across various age groups say it is evident that today’s shoppers are taking a stand. Nine out of 10 (93%) purchased more or maintained green purchase habits over the past year. Almost eight out of 10 (77%) found sustainability as an integral factor when shopping online and 44% purchase green products to help save the environment. Sustainable products sell 2.7 times faster online. Gen Zs and millennials are more likely to explore sustainable products than older generations too, with 32% choosing retailers that carry such products.

Having said that, some challenges need to be addressed before which sustainable logistics can become commonplace too. The availability of Sustainable Aviation Fuel presents a significant challenge. While demand for SAF is increasing, its production and distribution infrastructure remain limited compared to traditional jet fuel.

Additionally, the rate of change for corporates to become carbon neutral widely varies across countries.

What is the marketing strategy and marketing mix of DHLE?

DHL’s general rule of thumb is to ensure we follow all 7 Ps of Service Marketing - product, price, place, promotion, people, process, and physical evidence.

In terms of our product strategy, we offer a wide variety of services simplifying Global Trade for businesses in India. I mean, it can’t get any simpler than using ‘one login’ or ‘one account number’ to import & export from 220 countries worldwide. We are in the business of ‘Time Definite International’ and that is at the core of all our offerings, whether it be moving an LC document for a bank, Aircraft parts for our aviation customers, or temperature-controlled movement for our Lifesciences customers. It is a wide spectrum that we are serving.

A bulk of our business is built around SMEs globally; thus our services are value for money, powering the SMEs in the growth of global trade & eCommerce. The key for us is to be present - where our customers are, e.g. businesses in more than 750 cities in India can reach out to us locally to help them connect to more than 120,000 destinations globally – all through the power of ‘one’ DHL account.

DHL’s promotional mix includes television advertisements, and social media marketing, as well as heightening visibility through channels like radio, online, and print media. Our sports sponsorships are also a key part of this section. Globally our collaborations with teams such as Manchester United, Formula 1, Formula E, ESL, and closer to home our partnership with Mumbai Indians, helps us increase brand recall with our target audience. More importantly, it helps us be a part of a very special interaction - that between the sports team and its biggest fans.

In terms of process, we run multiple programs to ensure that we are constantly on the treadmill of improvement. DHL’s First-Choice internal program is a great example of this with one clear goal: to continuously improve ourselves to make life easier for our customers. First Choice encompasses many tried and tested tools and methods from Six Sigma, Change Management, and Lean. This approach, which is used throughout our company, ensures that we can improve service performance and processes in a structured and sustainable way, creating value for our customers in every single step of our business.

People are the foundation of DHL. To be an employer of choice, our priority is to ensure that our people know and believe that they are our priority – People First. Under this pillar, DHL focuses our efforts on employee engagement, employee listening techniques such as the employee opinion survey, performance dialogues, employee surveys in employer of choice certifications and importantly cultivating a ‘Safety First’ culture for our teams.

Last, but certainly not the least, DHL’s focus on physical evidence is clear through our extensive presence across 750+ cities in India, and our Branding through our always clean & shining retail outlets, vehicles & aircraft. Our impressive logo and brand packaging allow for top-of-the-mind recall for all our customers and target audiences, tying in beautifully with our sponsorships as well.

How was 2023 for DHLE and what are the growth projections, and expansion plans for 2024?

India’s real GDP expanded 8.4 per cent year-over-year in the fourth quarter of calendar year 2023, resulting in a 7.7 per cent growth for the full year 2023. Capital spending by the government and strong manufacturing activity have meaningfully contributed to robust growth outcomes in 2023. In the previous three quarters, India’s economy expanded at 7.8 percent in Q1, 7.6 per cent in Q2, and 8.4 per cent in Q3. The forecast continues to remain positive as the country is deemed to show over 8 per cent growth in the January-March quarter of 2024. Initiatives like Atmanirbhar Bharat, and increased investment in production-linked incentive (PLI) schemes tying in with the China+1 strategy show us that India sits at the cusp of booming transformation.

Even from the globalization perspective, this year's DHL Global Connectedness Report ranked India 62nd out of 181 economies, based on 2022 data. India is currently the world’s seventh-largest participant in international flows (trade, capital, information, and people flows combined). It is also the world’s fastest-growing large economy, and there is a strong positive relationship between a country’s level of economic development and its levels of global connectedness. This means that India’s international flows have a strong potential to grow even faster than its domestic activity moving forward, placing India in an increasingly central role in the future of globalization.

All of this cannot happen without an efficient and strong logistics backbone.

India thus, is a lucrative market for DHL Express. We have projected investments of €200m across facility expansion, fleet, and CAPEX lined up over the next five years (2024 to 2028). In line with the same, we announced the inauguration of the state-of-the-art Auto-sort facility in Delhi. It is the first facility to have automatic sorting machines among all Express operators in the country.

We have a robust air and ground network of more than four gateways, over 50 facilities, and nearly 750 service points, with a presence in over 33,000 locations in India. We also expanded our Faridabad service center and Bengaluru Gateway. The investment was part of DHL Express’ commitment to upgrading infrastructure in tier-two markets. We are also the first international express operator to sign a Memorandum of Understanding with the Directorate General of Foreign Trade (DGFT). The partnership with the Government of India further solidifies our commitment to India and aligns with our GoTrade program to empower MSMEs in the global market.

How is DHLE leveraging technology and digital media to enhance its operations?

Leveraging technology and digital solutions for enhanced operations is not new at DHL. We have two strategies - ‘Strategy 2025: Delivering Excellence in a Digital World’, and ‘WOW Strategy’ - that stress this.

As a global leader in logistics, DHL’s outlook is to ensure that our customers find it very easy to do business with us. This ease of use comes with using AI/ML solutions that help us become more efficient and provide quicker solutions for DHL’s customers. A great example is the recently inaugurated automatic shipment sorting hub in Delhi; it reduces transit times and ensures that DHL’s customers receive their shipments on time. AI/ML is also a great tool when it comes to speeding up international shipping and simplifying customs transactions. This is why we developed ‘My Global Trade Services’, an intuitive, all-in-one portal. MyGTS is a free, user-friendly platform that will help you navigate all international shipping regulations, seamlessly. Generative AI is here, and everyone is seeing its transformational and innovative potential. We are already looking into it for customer communication and chatbots. We are looking at not just OpenAI but other tools as well and creating our use cases.

DHL operates in 220 countries and territories and the underlying infrastructure is quite different depending on geography. We have set up a protocol called ‘100% uptime’ where we invest in technical solutions in business continuity plans (BCP) to ensure our systems operate 24x7 in all countries. For example, the rollout of ICS2.0 for all shipments being delivered in the European Union was taken over seamlessly across the globe. This aided us in delivering most of our customers’ shipments right the first time round, despite significant change to processes. By leveraging technology, we aim to stay competitive in a rapidly evolving logistics industry and continue providing innovative solutions to our customers.

What are the trends shaping the logistics, and transportation industry currently? What are the challenges and opportunities in the same?

Next-generation logistics management solutions are making the express logistics industry more customer-centric, tech-forward, and sustainable. To maintain an edge over competitors, businesses must stay tuned in to the emerging concepts in logistics. Emerging trends set to disrupt the logistics industry in a big way over the next few years include:

Globalization: Globalization will remain a key overall trend, and logistics its key enabler. As reported in the DHL Global Connectedness Report 2024, global connectedness reached a record high in 2022 and remained close to that level in 2023. The resilience and growth of international flows of trade, capital, information, and people in the face of recent crises strongly rebuts the notion that globalization has gone into reverse.

Green Logistics: Environmental sustainability is at the top of everyone's agenda. The new trends that have emerged carrying a significant impact are decarbonization, alternative energy solutions, circularity, and environmental stewardship. Sustainable aviation fuels are becoming a priority in the express logistics industry to promote the global harmonization of sustainability. The express industry will also see a rise in investments towards e-cargo planes.

Technology: To meet escalating consumer demand, companies must embrace automation and efficiency technologies, with a focus on indoor mobile and stationary robots. These innovations support ground staff, revolutionizing logistics through collaborative robots. Imagining logistics without automation seems implausible. Furthermore, integrating drone deliveries addresses last-mile inefficiencies, mitigates traffic bottlenecks, reduces emissions, and satisfies the growing consumer demand for on-demand, instant delivery.

E-commerce: E-commerce is a huge driver of parcel volumes and new types of last-mile services that better serve customer demands. E-commerce represents one of the chief opportunities for logistics companies.

Supply chain diversification: Diversification will significantly impact globalized supply chain networks in the next five to ten years. As the Global Connectedness Report stated, globalization is far from dead. The prospects for future trade growth are surprisingly upbeat, despite the recent shockwaves caused by a global pandemic, geopolitical crises, natural disasters, and patterns of protectionism. These events have put pressure on the business world to reimagine supply chains – to take a new path of resilience rather than receding from the global stage. The answer: supply chain diversification. Supply chain diversification means developing flexibility and redundancy to minimize risk and increase agility. Working with multiple suppliers is one way to achieve it. Another way is to expand and reimagine manufacturing and distribution networks. Yet another is using redundant and multimodal logistics solutions.

Challenges and opportunities

In terms of challenges and opportunities, The Logistics Performance Index (LPI) shows that India has improved its ranking since 2010 but still lags behind other developing countries, especially in logistics competence and infrastructure. To achieve its high growth target, these present challenges for the logistics industry.

Regulatory Barriers

The Courier Imports and Exports (Electronics Clearance) Regulation, of 2010 replaced the Courier Imports and Exports (Clearance) Regulation, of 1998, but some of the requirements from the previous regulation remain in place, such as restrictions on the import of certain commodities that require a no objection certificate (NOC) from allied agencies.

There is a value limit of Rs 5 lakh on exports of goods through couriers in India, which places Indian express companies and exporters at a disadvantage vis-à-vis their global competitors, particularly MSME exporters.

Infrastructure Barriers

India has the second-largest road network in the world, and over 64.5% of all goods in the country are transported through roads, However, issues relating to road networks, including long route corridors, major district roads, rural roads, and way-side amenities and safety measures need to be addressed to improve logistics efficiency.

There are gaps in planning for air express airport infrastructure at major airports. Even though there are dedicated express facilities at airports like Delhi, there is a lack of space for expansion, which restricts the growth of the express industry.

The global logistics industry had a CAGR of 4.2% between 2003 and 2020, and it is projected to reach $484 billion by 2030. The Asia-Pacific region is the largest contributor to the global express delivery industry, with India, China, and Singapore being the fastest-growing markets. Logistics development, increase in trade and trade facilitation, and the emergence of new technologies such as logistics 4.0 are likely to generate opportunities in the last-mile delivery of services and drive the growth of the global express delivery market.

Also Read: DHL Express extends Mumbai Indians partnership for fourth consecutive year