Slide 1TRAINING
Slide 2
What is the Global Heavyweight Express about?
How?
Target the right customers and decision makers
Understand where DHL can beat Freight Forwarders
Reinforce DHL Express value proposition to customers in the heavier weight category
Good margin
Big market opportunities
DHL price advantage
Why?
Operational capabilities
Existing customers shipping in this weight
Superior product
What?
An International Program designed to:
Increase international outbound and inbound shipments in the 40 – 150 lbs. range
Attract traditional users of freight forwarders
Slide 3
Global Heavyweight Business Case
Market analysis proved that the Market Opportunity is large in the US
International Express Rev / ShareLess than 150 lbs*
Other Express Carriers$2.9B39%
DHL Express$783M11%
Forwarders$3.6B50%
* Excludes Docs$USD
Source: Colography Group /
$ 3.6B worth of shipments less than 150 lbs. Forwarders carry instead of DHL
3000+ freight forwarders
Slide 4
Business Objectives
Why Can DHL Succeed Against Freight Forwarders?
Price
Reliability
Speed
Ease of use
Slide 5
DHL vs. Freight ForwardersComparison of Strengths & Weaknesses - PRICE
SpeedSpeed
Strengths and BenefitsCustomer
Requirement
Freight ForwardersWeakness’ and disadvantages
Single Price quote End Price not always clear
One shipment charge Multiple Charges
Local and Single Currency
Various shipping charges in multiple currencies
Single Invoice Multiple Invoices
Single Price all year Premium Peak Prices at busy times
Wide range of free packaging materials provide cost savings to customers
Packaging is chargeable for all sizes, weights and shapes
Price Visibility
Easy invoice reconciliatio
n
Easy invoice reconciliation
Control of Costs
PRICE ReliabilityReliability
Mgt ControlPackaging Materials
No Hidden Cost
Slide 6
DHL vs. Freight ForwardersComparison of Strengths & Weaknesses - RELIABILITY
PricePrice RELIABILITYRELIABILITY SpeedSpeed
Strengths and BenefitsCustomer
Requirement
Freight ForwardersWeakness’ and disadvantages
Reliable and well established worldwide infrastructure for international, express shipping
Use of multiple sub contractors leading to inefficient, complex and slower
international shipments.Door-to-Door Door-to-Airport
Airport-to-DoorAirport-to Airport
Global Track and Trace system with real time information
Not available/ track and trace limited to Airline systems
DHL trained staff from pick-up @ origin to delivery at destination
Use of sub contractors at all or most steps
Choice of automated solutions for shipment administration and management
Shipment documentation is chargeable
DHL Customs brokers in 170+ countries Extensive use of third part brokers and ‘clearance agents’
Higher security for peace of mind with trained DHL personnel – no 3rd party
Security is undermined by use of multiple agents
Delivery Service
Closed LoopSystem
Shipment Visibility
Customs Expertise
Security
Security
Mgt Control
Slide 7
DHL vs. Freight ForwardersComparison of Strengths & Weaknesses - SPEED
PricePrice
Strengths and BenefitsCustomer
Requirement
Freight ForwardersWeakness’ and disadvantages
Seamless, speedy door-to-door deliveries Longer delivery cycle for door to door
Guaranteed uplift on daily commercial and owned flights
Shipment consolidationUplift on alternate days
Priority loading and off-loading service with premium payment for guaranteed cargo space
Cargo space secured @ normal/lower rates hence, no guarantee/priority on
cargo handling93% of shipments cleared in the air into
the USA. We have direct links Government Customs systems
Only some freight forwarders are capable of Clearance in air
To Door Service commitment To port service commitment
DHL Customs brokers in 170+ countries – no need to outsource clearance of shipments to
external brokers
Extensive use of third part brokers and ‘clearance agents’
20+ years relationship with Customs.Government Customs Staff on site at our
gateways to speed clearance of shipments
Do not have the relationship DHL has built with Customs
Delivery Service
Closed LoopSystem
Guaranteed Space
Customs Expertise
Clearance in Air
Seamless transportation
ReliabilityReliability SPEEDSPEED
Customs relationship
Slide 8
Cost comparison DHL V Freight Forwarders
Straight forward Competitive Pricing DHL Express is price competitive up to 150 lbs, depending on the direction of trade and trade lane.
0
50
100
150
200
250
Mex
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Italy
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Internal Market Analysis
DHL Price Competitiveness by Weight vs. Average Forwarder (OB- lbs.)
0
20
40
60
80
100
120
Mex
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Arg
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Fra
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Italy
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Internal Market Analysis
DHL Price Competitiveness by Weight vs. Average Forwarder (IB - kg)
Slide 9
Freight Forwarder Invoice
In this one Freight Forwarder invoice there are 14 Charges in two Currencies
Slide 10
Generally, Forwarders quote only the Air
Freight portion, making DHL look expensive.
1 Pick up
2 Export Documentation
3 Outbound Airport Handling
4 Air Freight
5 Inbound Airport Handling
6 Customs Clearance
7 Delivery
466$ 541$
70$
146$
60$
115$
95$
20$
35$
Freight Forwarders
One price Multiple Costs
PricePrice ReliabilityReliability SpeedSpeed
A 50 kg Shipment of toy kites from Chicago to Singapore
OB Airport Handling: Handling ($35) + Airport Transfer ($25) + Terminal Charges ($35) Air Freight: Air Freight ($60) + Fuel Surcharge ($30) + Security Surcharge ($25) Customs Clearance: Customs Brokerage ($51) + Documentation ($38) + Customs Examination ($32) + EDI ($25)
DHL Price: Considers a customer that ships 3-4 p/mth with RSD discount (24%)
Generally, Forwarders quote only the Air Freight portion, making DHL look
expensive.
Slide 11
Global Heavyweight Tool
Enables you to compare DHL prices against a forwarder.
Pre–Loaded forwarder rates for specific countries.
Ability to enter in specific forwarder rates that you may have obtained from a customer.
Easy to print of Comparison charts and graphs.
To obtain instructions on the Global Heavyweight Pricing Tool please download instructions from the GHWE micro site.
Date: May 05 2006
Prepared by: Reference RateUS Gateway
Shipment Type
Destination
Minimum/Weight Bands
-45
45
Customer Name 100
DHL Contract 200
DHL Discount 300
Fuel Surcharge % 500
WPX Extra Charges
Items
AWB Fee Higher of Min or Per Unit 20.00 0.00 0.0%
1.00 Customs Clearance (Origin) Higher of Min or Per Unit 0.00 0.00 0.0%
5.00 Customs Clearance (Destination) Higher of Min or Per Unit 150.00 0.00 0.0%
10.00 Delivery Charge Higher of Min or Per Unit 65.00 0.00 0.0%
25.00 Documentation Higher of Min or Per Unit 0.00 0.00 0.0%
50.00 Fuel Surcharge Higher of Min or Per Unit 20.00 0.30 0.0%
75.00 Handling Charge (Origin) Higher of Min or Per Unit 30.00 0.12 0.0%
100.00 Pickup Charge Higher of Min or Per Unit 35.00 0.30 0.0%
125.00 Security Surcharge Higher of Min or Per Unit 10.00 0.15 0.0%
150.00 Terminal Fee Higher of Min or Per Unit 30.00 0.00 0.0%
175.00 Handling Charge (Destination) Higher of Min or Per Unit 0.00 0.00 0.0%
200.00 Airport Transfer Higher of Min or Per Unit 15.00 0.10 0.0%
225.00 Automated Export System 15.00 0.00 0.0%
350.00 Extra Charge 1 0.00 0.00 0.0%
500.00 Extra Charge 2 0.00 0.00 0.0%
Discount - 2006 Base
18.50
34.75
Per Kg
Freight Forwarder Name ABC Freight Forwarder Company
Per Shipment55.00
51.50
355.00
426.00
87.25
211.50
281.00
Weight (Lbs)
580.00
652.50
507.50
50.0% Discount, Zone K
1.81
1.75
1.51 Per Kg
Per Kg
McArthur Jr
1,015.00
1,450.00
DHL & Forwarder Rates Comparison
Outbound (WPX)
#N/A
146.00
INPUT DHL RATES
INPUT AIR FREIGHT FORWARDER RATES
Discount - 2006 Base
50.0%
14.5%
Per Kg1.45
1.39
1.33
Extra Charge Format
Per Kg
Per Kg
Per Shpt / Min. Charge
Per Unit Fee
% of Freight
Rate Comparison
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1.00 5.00 10.00 25.00 50.00 75.00 100.00 125.00 150.00 175.00 200.00 225.00 350.00 500.00
Weight (lbs)
$US
D
AFF Freight AFF Extra Charges Total DHL Rates (Incl. Fuel Surcharge)
B
A
C
D
E
Outbound (WPX)
Brazil
Discount - 2006 Base
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Per Shipment only
Per Shipment only
Miami-Ft Lauderdale Origin Rates (Outbound Only)
Brazil
JFK
Slide 12
Global Heavyweight Tool Tip’s
Date: May 05 2006
Prepared by: Reference RateUS Gateway
Shipment Type
Destination
Minimum/Weight Bands
-45
45
Customer Name 100
DHL Contract 200
DHL Discount 300
Fuel Surcharge % 500
WPX Extra Charges
Items
AWB Fee Higher of Min or Per Unit 20.00 0.00 0.0%
1.00 Customs Clearance (Origin) Higher of Min or Per Unit 0.00 0.00 0.0%
5.00 Customs Clearance (Destination) Higher of Min or Per Unit 150.00 0.00 0.0%
10.00 Delivery Charge Higher of Min or Per Unit 65.00 0.00 0.0%
25.00 Documentation Higher of Min or Per Unit 0.00 0.00 0.0%
50.00 Fuel Surcharge Higher of Min or Per Unit 20.00 0.30 0.0%
75.00 Handling Charge (Origin) Higher of Min or Per Unit 30.00 0.12 0.0%
100.00 Pickup Charge Higher of Min or Per Unit 35.00 0.30 0.0%
125.00 Security Surcharge Higher of Min or Per Unit 10.00 0.15 0.0%
150.00 Terminal Fee Higher of Min or Per Unit 30.00 0.00 0.0%
175.00 Handling Charge (Destination) Higher of Min or Per Unit 0.00 0.00 0.0%
200.00 Airport Transfer Higher of Min or Per Unit 15.00 0.10 0.0%
225.00 Automated Export System 15.00 0.00 0.0%
350.00 Extra Charge 1 0.00 0.00 0.0%
500.00 Extra Charge 2 0.00 0.00 0.0%
Discount - 2006 Base
18.50
34.75
Per Kg
Freight Forwarder Name ABC Freight Forwarder Company
Per Shipment55.00
51.50
355.00
426.00
87.25
211.50
281.00
Weight (Lbs)
580.00
652.50
507.50
50.0% Discount, Zone K
1.81
1.75
1.51 Per Kg
Per Kg
McArthur Jr
1,015.00
1,450.00
DHL & Forwarder Rates Comparison
Outbound (WPX)
#N/A
146.00
INPUT DHL RATES
INPUT AIR FREIGHT FORWARDER RATES
Discount - 2006 Base
50.0%
14.5%
Per Kg1.45
1.39
1.33
Extra Charge Format
Per Kg
Per Kg
Per Shpt / Min. Charge
Per Unit Fee
% of Freight
Rate Comparison
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1.00 5.00 10.00 25.00 50.00 75.00 100.00 125.00 150.00 175.00 200.00 225.00 350.00 500.00
Weight (lbs)
$US
D
AFF Freight AFF Extra Charges Total DHL Rates (Incl. Fuel Surcharge)
B
A
C
D
E
Outbound (WPX)
Brazil
Discount - 2006 Base
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Higher of Min or Per Unit
Per Shipment only
Per Shipment only
Miami-Ft Lauderdale Origin Rates (Outbound Only)
Brazil
JFK
Show a ‘Typical’ example from your region to gain customer interest.
Gather all the information you need.
Make sure that you have included all the extra charges.
Ask the customer if you think they have not included all Extra Charges.
Use standard charges if they do not know all of their Forwarder charges.
Slide 13
You are now the key: Target the right customers Find the decision makers Determine if they want express
or deferred Use your sales approach
accordingly
You have the tools: Pricing Tool Portfolio Optimiser COMET
DHL has what it takes: Price Reliability Speed Customers prefer to use us!
Big opportunities: Big Forwarder market Big Revenue Fragmented Competition FTB/SPD
Summary: Selling Heavier Weights
DHL carries 2 Million Packages over 20 kg every year.