Deutsche Post DHL Targets $2.2 Billion in Tech Upgrades
October 01 2019 - 5:56PM
Dow Jones News
By Jennifer Smith
Deutsche Post DHL Group plans to invest $2.2 billion on digital
initiatives through 2025 as the global logistics company looks to
e-commerce to drive growth across its business lines.
The investments are part of a push for greater efficiency as
parent company Deutsche Post AG focuses on long-term profitability
in its core logistics businesses. The company expects the
accelerated technology upgrades to help increase operating profit
to at least $5.8 billion in 2022.
The new steps include stepping up use of warehouse automation
and robotics, applying data analytics to optimize routes and
improving volume forecasting and developing technologies for use
across the company's business lines," the company said Tuesday.
The German operator's move comes as big freight transportation
and logistics providers are pouring millions of dollars into
technology, driven in part by digital-focused startups that are
trying to siphon away business with technology targeting the
shipping world.
Deutsche Post's DHL provides express delivery, freight
forwarding and supply-chain services including warehousing and
online fulfillment in more than 220 countries. The company also
provides post and parcel delivery in Germany. DHL's supply chain
and global forwarding divisions together comprised the top global
third-party logistics provider in 2018 by gross revenue, according
to research firm Armstrong & Associates.
"We are the only company that is able to offer single elements
as well as the entire e-commerce supply chain on a global scale,"
from inbound logistics to fulfillment, delivery and returns,
Deutsche Post Chief Executive Frank Appel said. "We need not
reinvent ourselves. We will digitalize ourselves."
Technology is transforming the logistics industry, from
visibility software that tracks the movement of goods through the
supply chain to the proliferation of online marketplaces that use
algorithms to connect truckers with shippers looking to move
freight.
The advancements, propelled in part by the growing field of
startups, are pushing traditional transportation companies to
accelerate technology spending "to drive higher productivity as
they look to defend or expand market share," Stephens Inc. analyst
Jack Atkins wrote in a research note last month.
C.H. Robinson Worldwide Inc., the largest North American freight
broker, said last month it plans to spend $1 billion over the next
five years to bulk up its technology. And XPO Logistics Inc., one
of the largest logistics providers in North America, has increased
its capital spending from $504 million in 2017 to a planned $650
million this year, the company said, with much of it going toward
technology.
Write to Jennifer Smith at jennifer.smith@wsj.com
(END) Dow Jones Newswires
October 01, 2019 17:41 ET (21:41 GMT)
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