Shipping the future: In Venezuela, DHL moves away from documents and into the world of e-commerce - Strategies

Noel Poler recognizes that a company needs to keep evolving to stay alive. In the case of his company, DHL Worldwide Express, this has meant developing new niches in tandem with new technologies. After all, how much future could there be for a company devoted to moving documents when more and more of its customers move those documents over phone lines and the Internet, faster and cheaper?

Five years ago, prior to Poler's arrival as managing director for Latin America, DHL earned more than 90 percent of its revenues in Venezuela by shipping documents. Today, document transfers generate less than half its revenues, and Poler says that within five years that number will drop to around 10 percent.

Using Venezuela as the model, Poler has refocused DHL in Latin America to become a delivery company for goods. "An important part of DHL's change in mentality is that today, our main competitors aren't other courier companies," he says. Rather, DHL has taken on cargo shippers and freight consolidators. Its strategy: With a delivery network serving 625 cities worldwide, DHL can move freight within its existing distribution system and avoid bottlenecks at the centralized hubs shared by big shippers.

So far, so good: Venezuelan revenues of US$25 million for 1999 are up strongly from 1996's US$11 million, and are projected to grow to US$30 million this year.

But this is the present. DHL's most significant transformation, Poler says, has been to position itself for the world of e-commerce. In the three years since Poler has taken over, he has helped the company gain approximately 80 percent of the Venezuelan package delivery market for electronic commerce. "If I'm in this for anything, it's for the Internet," Poler says, citing company projections that say one day some 70 percent of all package deliveries worldwide will originate from online transactions.

That is still years away. While pundits predict that e-commerce in Latin America will ultimately grow to a multibillion dollar business, last year the entire region racked up just US$77 million in online sales. Despite the small revenues, analysts agree that market leadership in the Internet is all about getting there first with the most. Having invested US$700,000 in new software last year (and with plans to invest another US$1 million this year), DHL initially established its e-trade dominance in Venezuela by being the first shipper to offer online tracking. The next step, says Poler, will be to continue the reinvention of DHL as a multi-service, value-added mover of goods; last year the company began to offer mailroom and logistics management.

"Our strategy has been to identify all of our clients' distribution-related needs and position ourselves as a solution to all of them," says Poler. "And we really are in the first half of the first inning as far as technology is concerned."

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