WHEN Herbert Vongpusanachai moved to Singapore from Thailand in 2008 to take up the post of general manager at DHL Express Singapore, the world was living in trepidation, wondering how long and deep the financial crisis was going to be.
DHL, however, did not hold back on its plans to grow capacity or pilot new initiatives. Mr Vongpusanachai’s experience in dealing with a crisis – he had a taste of it back in Thailand in 1997 during the Asian financial crisis – taught him one thing: that what goes down must come back up.
“One of the things we learnt … is to plan ahead and be ready for the moment it turns upwards,” said Mr Vongpusanachai, who is now managing director of DHL Express Singapore. “The good thing about Singapore is that when we have a slowdown, we get hit first because we are very connected internationally. We get hit first but when we pick up, we also pick up first and we pick up very strongly.
“We have to get ready and build infrastructure, and also make the appropriate investments and adjustments during the downturn. That allows us to move forward and when the (upturn) comes, we can then have a great ride.”
So despite the sharp slowdown the logistics and supply chain industry was going through in 2009, the company went ahead with a planned upgrade of its aircraft fleet from Airbus A300-600 freighters to Boeing 747s. Since the A300-600F had a capacity of 43 tonnes and the Boeing 747 some 100 tonnes, the upgrade more than doubled DHL’s capacity.
“We believed in the future of Singapore. It’s not that we were going to fill them up the next day, obviously we didn’t, but we gradually built our volume and also increased customer trading as the economy recovered.”
That seemingly risky move has paid off. “Today the planes are full,” said Mr Vongpusanachai.
DHL also took the lull period to make other improvements, such as upgrading its courier scanners and sending staff for training.
Then there is the DHL Medical Express – which was officially launched earlier this year but was piloted during the crisis period. According to Mr Vongpusanachai, the new service has roots in the resilience of the life sciences industry, which continued to grow despite the downturn.
DHL’s role is to aid clinical trials by delivering patient samples from the Asean (Association of Southeast Asian Nations) region to laboratories in Singapore for testing.
Said Mr Vongpusanachai: “We need to make sure that we can get samples picked up from anywhere in Asean and bring them for testing to Singapore.”
The sensitivity of the contents means a lot of care needs to be taken on the packaging front. The samples typically require ambient temperature or some form of temperature control, so DHL had to make the necessary adjustments to its packaging.
According to Mr Vongpusanachai, the three most common temperatures needed for the laboratory samples are ambient, chilled – at between two to eight degrees celsius – and frozen (-20 degrees celsius).
The chilling and freezing requires DHL to include dry ice in its packaging.
“We had to make the necessary changes to our packaging and we also had to put in the necessary infrastructure to, say, refill it with dry ice,” he explained.
Apart from appropriate packaging, speed is also crucial to its medical express service. This is because samples have to be sent to Singapore, tested, and sent back to the regional labs within 48 hours. If it does not meet the 48-hour deadline, the sample becomes invalid, he added.
DHL now has a healthcare hub in Changi South, where it carries out a wide range of work, such as providing secondary packaging services for pharmaceutical products and keeping test kits. “We send them (test kits) out, we take the samples, pick them up, send them for testing in Singapore and within 48 hours they have to go back to the labs they came from.”
Aiming to be the best
While DHL is not the first in the industry to launch such a service, it aims to be the best, said Mr Vongpusanachai.
And as Singapore strives to be the regional hub for sectors such as healthcare and even oil and gas and aerospace, DHL Express aims to keep moving with the times and provide the necessary services needed to meet clients’ needs.
Said Mr Vongpusanachai: “We are always on the lookout for opportunities… We look at new, emerging industries in Singapore, and there are many. We are becoming not only a healthcare hub. We have always been very active in oil and gas, so as energy becomes more and more an area of focus especially in the region, DHL Express wants to participate in that.”
But here is also where the big question lies. Singapore may have some new emerging industries, but the logistics industry here has many players fighting with one another for business, with 20 of the top 25 global logistics players having operations here. And like DHL, many of them, such as Kuehne + Nagel, Sankyu, Schenker and UPS, have set up regional or global headquarter functions in Singapore.
So is the industry here too saturated? Mr Vongpusanachai does not think so.
“I think it is not saturated. It is a very competitive and very active market, and the market is growing. It is only saturated if the market does not grow.”
Singapore, he said, plays a leading role in logistics and supply chain in Asia, and the continent is growing rapidly especially when compared to other regions in the world.
“Singapore is the central hub for many countries in this region, and that is an opportunity (for logistics players) because the reason we can operate so well here and cope with the volume is because we have connecting aircraft, airlines that stop by in Singapore, and we can connect to anywhere in the world from Singapore.
“Singapore has been a great success story,” said Mr Vongpusanachai. “The key point about Singapore has always been the connectivity and the ability to allow seamless global trade. Singapore has always positioned itself as the hub for trading, and global trade has grown tremendously over the years.
DHL came to Singapore as early as 41 years ago, when the country had just gained independence. Since then, it has been a central point for the firm to service countries in South-east Asia.
“The (Singapore) government has always been very pro-business. It made sure that we have a strong intellectual property regime. We protect people who come and invest here, and their investments … and we have skilled people who have been trained properly and can do the job.”
Making the transition
Going forward, he believes that Singapore’s position as the hub for the region will remain unrivalled, although its areas of focus may change as sectors such as manufacturing move to lower cost economies, and the logistics industry must be ready to make the transition.
“Industries may migrate to different regions but Singapore will become more and more high value, and focus on high intellectual property content type of products and services, for example pharmaceuticals, medical research and development, precision instruments, advanced engineering and aerospace. So these are the industries that Singapore is well suited to do and many countries will struggle to reach Singapore’s capabilities in these areas,” said Mr Vongpusanachai.
For the logistics industry, it will have to develop infrastructure and know-how to meet the needs of customers in these sectors.
To do this, DHL has set up what it calls Centres of Excellence in Singapore that focus on introducing new technology, infrastructure and employee training, to ensure that DHL can meet the evolving needs of the sectors it serves.
“Singapore is becoming more and more developed in being the regional distributor of advanced products and services, so we developed Centres of Excellence to house new technology to enable our people to handle the demands of these new industries,” said Mr Vongpusanachai.
As Singapore takes steps to transform into a more productive economy, DHL has taken steps to “automate in the right places”, he said.
“We automate in the right places, look at new sorting equipment, and look into providing more web-based and mobile solutions. All of these allow our customers to be more productive.”
Small and medium-sized enterprises (SMEs), in particular, can benefit from DHL’s infrastructure. “SMEs don’t have the infrastructure so they can leverage from all the technology that we provide.”
For instance, instead of trying to trace shipments by calling DHL, they can simply send an email and have DHL provide an automated response that tells them where their shipments are.
DHL also has a portal called MyDHL that gives customers access to a variety of services with a single login. Information provided include tracking details on shipments and billing information. They can even request DHL to pick up shipments from anywhere in the world from the portal and pay online by credit card. Previously, customers had to call the firm if they needed to pick up shipments, which meant that DHL also needed staff on hand to do these bookings.
“It’s more convenient, customers don’t need to pay cash and everything is automated. We are now more productive because our employees can spend more time adding value rather than doing just bookings,” said Mr Vongpusanachai.
All of its staff are also required to go for training under DHL’s Certified International Specialists Program, which is rolled out across its offices worldwide. The programme trains every single DHL employee so that “we understand the same things”, explained Mr Vongpusanachai. He added that all employees have been trained in the foundation courses, and DHL is in the midst of rolling out more advanced classes.
Going forward, the group’s aim in Singapore is simple. “We want to offer the best service to Singapore and in order to do that, we have to pioneer and work on new types of services and bring convenience to our customers, and make sure we are easy to work with.
“Our goal is to please the customer and ensure that their first choice of provider is us. That is our ultimate goal, to be the provider of choice,” said Mr Vongpusanachai.
This monthly series is supported by IBM
DHL Express Singapore
- Owned by Deutsche Post DHL
- Network of 120,000 destinations in more than 220 countries and territories
- Has over 560 employees
- 21,167 active customers (as of April 2012)
- 114 retail outlets offer DHL Express services
- Five dedicated aircraft operate on DHL’s air network
- Ran 100 commercial flights a day on average last year
Moving with the times
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