The Deutsche Post DHL Group is stripping out its e-commerce vertical from its troubled Post – eCommerce – Parcel (PeP) division to give the rapidly growing e-commerce business room to breath, with Ken Allen giving up his Express post to take on the new division.
The remaining post and parcel business will be refocused on the German domestic market and renamed Post & Paket Deutschland, remaining under the interim leadership of Group CEO Frank Appel. The international parcel and e-commerce businesses – previously DHL Parcel Europe and DHL eCommerce – will be established as a standalone division, DHL eCommerce Solutions, under the leadership of corporate board member Ken Allen.
“Having one operating division of the Group fully dedicated to the German post and parcel business will ensure even more stringent execution of the previously announced PeP turnaround plan,” DP DHL says. This plan includes improved yield management, indirect cost reduction and productivity improvement measures.
The PeP division’s woes were clearly demonstrated in the Group’s recent second quarter results, where despite a 3.4 per cent upturn in divisional revenue, operating profit plunged 58.5 per cent, dragging the group down with it. Not even a 56.7 per cent uptick in profitability for Global Forwarding and growth of 10.2 per cent in the Express division could triage the PeP wound, with group profits dropping 11.2 per cent year-on-year.
At the same time, by creating the DHL eCommerce Solutions division, the Group says it will be better positioned to leverage opportunities within the booming e-commerce logistics sector in Europe and around the world.
The Supervisory Board of Deutsche Post AG today named Ken Allen as the Board member for DHL eCommerce Solutions and extended his contract to the Corporate Board of Management until 2022. In addition to his new e-commerce role, he will keep the responsibility for Customer Solutions & Innovation (CSI) and will lead the further development of the overall e-commerce strategy for the Group.
“Ken Allen has successfully shaped the Express strategy and has led the division on an unparalleled growth trajectory by unlocking its revenue and profit potential. With his relentless focus on the core principles of customer centricity, employee engagement and profitable growth, Ken established truly world-class processes within the Express division, making it the most profitable division of Deutsche Post DHL Group,” said chairman of the Supervisory Board of Deutsche Post DHL Group, Nikolaus von Bomhard.
“I have no doubt that the DHL eCommerce Solutions division will greatly benefit from Ken’s ability to deliver exceptional performance and value for DHL customers, using his significant experience in building networks and leading people with an inspirational style.”
John Pearson will take over the Board mandate for DHL Express. Pearson joined DHL Express in 1986, and served the company as CEO in Asia Pacific, EEMEA and Europe, as well as leading the global sales, marketing and customer service functions of the DHL Express division as global commercial head.
“We are pleased to have John Pearson join our Corporate Board. He has a proven track record, along with a deep understanding of the Express business. Not only does he have extensive operational and business experience of the Express division but John has been a key member of the leadership team running the Express division along with Ken. I’m confident John’s experience will prove immediately valuable to the Board, and that he will take DHL Express to new and greater heights in the years to come,” said Deutsche Post DHL Group CEO Frank Appel.
All changes come into effect on 1 January 2019.