Dialogues

Logistics Veterans in New Era Leadership Roles

DHL Express has introduced a new leadership team early this year to lead its Asia Pacific operations. Mr Ken Lee was named as the new CEO of Asia Pacific as he succeeds Mr Jerry Hsu, who is retiring after an illustrious career with DHL Express since 2001.

As former Managing Director of DHL Express Hong Kong and Macau, and Executive Vice President of Commercial, Asia Pacific, Mr Lee was responsible for doubling revenue in the two countries between 2009 and 2012. A member of the DHL Express Asia Pacific Management Board, Mr Lee was also responsible for driving the development of DHL’s two most strategic hubs in the region – Singapore and Hong Kong – which handle over 20 per cent of the company’s express shipment volume today.

Mr Lee’s promotion has led to several changes in the management team. Mr Herbert Vongpusanachai was appointed the Managing Director of DHL Express Hong Kong and Macau, and will be responsible for steering and managing the strategic growth and overall operations of DHL Express in Hong Kong and Macau.

Mr Vongpusanachai brings a wealth of experience in the regional express delivery business, having held his previous position as Managing Director of DHL Express Singapore for seven years. Since 2008, under his leadership, the company has achieved strong business growth with positive revenue performance, as well as garnered numerous external awards and recognitions for excellence in customer service, corporate responsibility and sustainability, and more.

Succeeding Mr Vongpusanachai is Mr Frank-Uwe Ungerer as the Managing Director of DHL Express Singapore. Having joined DHL in 2003 as Country Manager of DHL Express Russia, Mr Ungerer has since held various positions, most recently as Country Manager of DHL Express in the United Arab Emirates, where he was in charge of day-today regional operations for close to six years. During this time, he has led the business to exceptional performance and significantly strengthened its market leadership.

With a combined experience of over 50 years, the company continues to believe that investing in its people is a key strategy to usher in the new era of the supply chain and logistics industry.

“One thing which remains true till this day is that logistics is an industry that relies on people. Although we see a lot of infrastructure, machinery, planes, trucks and all that, at the end of the day, it is the people who are moving the business and industry. I strongly believe that frontline is where the action is,” says Mr Lee.

In this issue of Supply Chain Asia magazine, we present a special feature on the upcoming DHL Express senior management team spearheading the company’s Asia Pacific operations.

Interview with Ken Lee, CEO of Asia Pacific, DHL Express

According to your profile, you have had over 20 years of experience in the logistics industry, including 18 years at DHL. How did you get into this industry and what captured your initial attention?

To be frank, I did not really know what I wanted to do after graduation. I applied for three jobs: one with a bank, one with an engineering firm, and one with Singapore Airport Terminal Services (SATS). I received offers from all three but I ended up joining SATS because they were the first company to put forth a formal offer to me. And I thought to myself, why not? SATS is a fully owned subsidiary of our national carrier Singapore Airlines. As a Singaporean, I get a great sense of pride working for such a company and in an industry that plays such a pivotal role in the country’s economic growth.

Logistics was also considered a fairly stable and secured industry as it is closely tied to the economic activities such as trading and manufacturing, which was powering the growth of many newly industrialised economies in Asia during that period.

In those days, logistics was a rather new and emerging industry. To me, it was simply about moving goods from one place to another. But the industry has come a long way, having developed so quickly over the last 20 years with advancement in the science of supply chain management, information technology, the internet as well as the fast changing customer demand.

When you were the managing director of DHL Express HK & Macau, you were responsible for doubling revenue in the two countries between 2009 and 2012. How did you achieve that? What was the all-important strategy behind this?

During this time, Hong Kong and Macau were undergoing sluggish trade growth. As a historical trading port and a conduit of trade and investment into China, Hong Kong itself has limited growth capacity. But as a trading and trans-shipment logistics hub, Hong Kong has unlimited potential. So the first thing I thought of when I took over the Hong Kong business portfolio was that we need to look outside of Hong Kong to tap into these new sources of growth.

I think we were able to successfully achieve that, and with China’s economy fueling a lot of both Hong Kong and Macau’s economic growth at that time, we rode onto that opportunity and catapulted our business to a whole new level.

We could not have achieved or sustained our growth without a team of great people. Personally, I devoted a substantial amount of time to talking to our couriers, managers, and others on the ground – keeping them connected with our overall objectives and discussing what this meant in terms of their day-to-day roles and objectives.

Most of all, I wanted to hear from employees and customers as to what was working and what was not, so that I can inculcate in our people a practical and intensely customer-centric mindset, and know how to support and empower them in the frontline.

I made it a point of encourage our people to challenge the norm and not simply accept the status quo – which meant standing up for them when they needed help or executive backing to change things for the better. This is part of the give-andtake that any leader has to embrace, not just in logistics. Singapore has been a key hub for DHL Express.

In these past two years, DHL has unveiled the DHL Express South Asia Hub and DHL Express Innovation Centre. Can you share with us why?

Singapore enjoys a twofold advantage when it comes to logistics: its proximity to Asia’s emerging economies and public policy that is highly supportive of innovation and R&D.

We established our South Asia Hub to provide higher capacity and greater connectivity to support trade growth throughout the region. Having a hub in Singapore means we can continuously improve product choice and speed up responses to match growth in this region.

A significant part of Singapore’s GDP is also derived from logistics – around five per cent on its own, and more than seven per cent if you include the broader transport and storage sector. We are fortunate to have public policy that recognises this contribution and encourages innovation in a range of logistics areas.

While it may be difficult to predict which technology or economic trends will have a long-term effect on the logistics industry, we need platforms upon which we can discuss and capitalise on these trends. The Asia Pacific Innovation Centre is one such platform, bringing together customers and stakeholders from private and public sector alike to share their knowledge and create new value for the logistics industry.

As a Singaporean, I always feel a bit of pride when considering the growth of our presence here and its contribution to our nation’s economy.

In your opinion, what are some of the challenges the new DHL Express leaders face that your predecessors did not?

Tough market conditions are the biggest issue at the moment. The other challenge is that customer service itself is changing rapidly: demand for “anytime, anywhere, any device” means we need to quickly embrace new technologies and use them to directly upgrade the customer experience.

My team and I try to take a “two steps ahead” approach to the innovation challenge. For example, we launched on-demand delivery services in Asia Pacific last year, allowing consignees to reschedule, reassign addresses, and make changes much more flexibly to their deliveries. By improving the consignee’s experience, we also make the seller – our customer – look good and gain greater repeat sales. As people become less fixed in their locations – both receiving and sending shipments – we expect services like these to gain even greater traction than the promising growth they have already shown.

The key to this approach is listening to what our customers say. For example, we engage our customers on a regular basis to give feedback on how we can simplify and streamline shipping processes.

What do you find is most enjoyable about working at DHL Express?

DHL holds management directly accountable for whether our people are happy with working at DHL Express. Our annual employee survey gets translated into action and regular updates for teams. Managers strive to recognise staff performance in consistent yet creative ways. We also regularly host non-work activities for our people and their family members, including volunteerism and social responsibility opportunities.

My belief has always been that “Happy people deliver quality results.” The best bit about working at DHL is that the entire culture supports that belief in a way that goes far beyond lip service.

Interview with Herbert Vongpusanachai, Senior Vice President & Managing Director,
DHL Express Hong Kong & Macau, DHL Express

Prior to joining DHL Express Thailand, you worked with Microsoft Thailand for seven years holding several senior positions. Did you experience a sharp learning curve working in a different industry?

I definitely had to put in the extra effort to familiarise myself with the business as the subject matter was vastly different from that of my previous role.

I was assigned a senior advisor to help me get up to speed in my first three months here. His guidance gave me a better understanding of various aspects of the business, from customer service to frontline operations. I took a hands-on approach to learning – visiting our service centres to learn from my frontline colleagues; and taking on courier duties with our couriers.

I also sat side by side with customer service agents for a few hours every quarter to get acquainted with customer feedback. The team and I also performed the ‘Gemba Walk’, which follows the same principle as ‘management by walking around’, at service centres to familiarise myself with the process flows and activities, and identify opportunities for improvement. By working alongside frontline staff, I was better able to understand the daily challenges they face. More importantly, I was able to get more closely acquainted with the market by keeping an ear to the ground when it comes to customer demands.

What was your first official project or duty in your new managerial role?

One of the first things I set out to do was to get to know the team better and work together on key areas to cope with business growth. The emergence of e-commerce also allows local exporters to easily and cost-effectively explore overseas markets without needing to set up a storefront. Express services play a crucial role in maintaining competitiveness. This is especially true for the delivery of products, such as fashion accessories and electronics, which have a short lifecycle, and are therefore time-sensitive. There is a growing demand among online shoppers for greater flexibility to select their preferred time and place for delivery. This is especially the case with the younger generation, who are extremely mobile. In addition, same-day delivery has the potential to become a significant differentiator for retailers. We are therefore also looking into the possibility of providing more services that cater to the needs of the local B2C market. Such services can include more delivery options and pick-up alternatives.

What are the different logistics challenges faced by Hong Kong & Macau compared to Singapore?

Hong Kong and Singapore are among the best logistics hubs in the region due to their efficient customs clearance and connectivity. Hong Kong is strategically located within four hours’ flight to major cities in Asia, making it an ideal aviation hub.

However, Hong Kong International Airport (HKIA) faces some challenges. The availability of slots and parking spaces are key hurdles that hinder operations in the terms of cargo handling capacity — an issue that is not specific to Hong Kong, but rather, faced industry-wide.

DHL supports the HKIA’s third runway project, which will allow Hong Kong to stay ahead in Greater China’s vibrant air cargo market.

In your opinion, what will be the effects (if any) of Beijing’s new Silk Road on Hong Kong’s industry?

The past decade has seen an average 19 per cent annual growth between China and Silk Road countries. According to President Xi Jinping, the One Belt One Road (OBOR) initiative will generate more than US$2.5tr in annual trade within the next decade.

With the central government’s intention to boost domestic consumption, Hong Kong is well-positioned as the gateway for China and the international harbour for the OBOR initiative. It is also well poised to attract both investments and consumer goods from the relevant markets to China. Businesses with countries covered by OBOR account for two-thirds of the Hong Kong’s total trade. With operations in 65 out of 66 countries along OBOR, we foresee an abundance of business opportunities for the air express industry.

The free flow of information and Hong Kong’s excellent geographical location will continue to contribute to Hong Kong’s status as the regional logistics hub for OBOR.

Is Hong Kong’s timely airport expansion enough for it to stay competitive in the air cargo market?

The timely airport expansion plan will enable Hong Kong to ensure its long-term competitiveness as a premier aviation hub, supporting tourism, international trade, logistics, finance and professional services. It will help Hong Kong to stay ahead in Greater China’s vibrant air cargo market. The airport expansion will boost cargo handling capacity by providing more slots and parking spaces.

The expansion and construction of new airports in China is also indicative of the strong aviation demand in the region.

The HKIA reported another record year for cargo throughput in 2015/2016. It handled 4.36 million tonnes of cargo last year, making it the world’s busiest air cargo hub. The air cargo that passes through HKIA each year represents about 40 per cent of Hong Kong’s total external trade value.

We are also positive about HKIA’s future, based on the forecast of 8.9 million tonnes of cargo going through the airport by 2030. The investment of more than HK$140bn (€16bn) in the expansion of HKIA is a substantial commitment for the future of the logistics industry in Hong Kong.

Our Central Asia Hub in Hong Kong boasts the region’s largest throughput. This large volume can be attributed to surging exports from mainland China and the Pearl River Delta, as well as growing demand and rising consumption across Asia Pacific.

What do you find most enjoyable about working at DHL Express?

I remain energetic and eager to take on the daily challenges of the job – even after 14 years at DHL.

People are the key to making work life at DHL Express enjoyable. We all embrace the “Insanely Customer Centric Culture”. We believe that being our customer’s first choice is the only way to stay ahead of the competition. I love working with a group of motivated people who share a common goal — to deliver outstanding customer service in everything we do.

Interview with Frank-Uwe Ungerer, Managing Director, DHL Express Singapore

How will your experience having worked in logistics across countries including Germany, Russia, China and Greece help you in understanding Singapore’s logistics industry?

We are in the network business. The global nature of our business requires an understanding of how differently things work in various part of the world. Having worked in these markets, including United Arab Emirates (UAE), I have gained a fuller perspective of the role logistics play as a trade enabler.

Experience is also a valuable asset that offers great learning. In each of these countries that I have worked in, there were different challenges posed by varying states of the economy. Russia was all about growth and overcoming red tape; Germany is a mature and highly developed market; with China comes sheer size and volume, and hyper growth; Greece was deep in debt during the last global crisis. UAE, where I was in for the last six years, was a booming economy. There are great ideas and best practices from each of these markets that can be adapted to deal with the challenges of the local industry.

What are the different logistics challenges faced by Singapore compared to the countries you have managed?

Being an open economy means that Singapore has to find its competitive edge over not just countries in the region, but also other bigger markets. Here, customers are generally more demanding and that requires us to get it right first time every time. While it is relatively easy to start doing business here, keeping customers loyal is the real challenge. The workforce here is highly-skilled and this helps to ensure we are able to keep a high standard of service quality.

Singapore has been a key hub for DHL Express. In these past two years, DHL has unveiled the DHL Express South Asia Hub and DHL Express Innovation Centre. Can you share with us why?

Singapore’s strategic location has always been its key strength since its earliest days as a trading port. From a network perspective, be it regional or global, Singapore’s connectivity and skilled workforce are clear pull factors for setting up our South Asia Hub and the first innovation centre outside of Germany here. The economic and social stability brought about by an able and pro-business government added to its attractiveness as a business hub for many multi-national corporations, including DHL.

In your opinion, is Singapore’s decision to embrace the Smart Nation initiative enough to ensure the nation stays competitive in the region?

It is definitely an initiative that will get us ahead, but only time will tell how far ahead it can get us. That said, few nations have undertaken such an encompassing and bold approach to building pervasive connectivity for the collection of data that will change the way we work, live and play.

Besides building the hardware such as new infrastructure and technical architecture, efforts have to be made around preparing the software – shifting mindsets and upgrading skills to make full use of the technology in order to fulfill the “smart” vision. It is the right approach to start with education and working with tertiary institutions so that our fresh workforce is well-equipped to use smart technology to gain a strong foothold amidst free market forces.

There have been reports of possible taxation on e-commerce sales being implemented in Singapore. What are your opinions on this? Will it affect the robust e-commerce market here?

Singapore is touted to be the largest e-commerce market in Southeast Asia, growing by 16 per cent over the next five years despite the short-term consolidation that we are currently seeing. Countries like the Philippines and the US have recently raised their de minimis values (miminum value of imported goods that will be taxable) in a move that is encouraging for e-commerce buyers. It will be counterintuitive to go against the wave instead of riding it. e-Commerce has given consumers more choices than they ever had before; it has made entrepreneurs and created jobs. If we do not ride on this wave, others will.

Do you see drone parcel delivery taking off in Singapore anytime soon? Why or why not?

In the near future, we see drones being deployed for niche segments, not so much for mass deliveries.

As a group, DHL has run numerous pilots on the use of unmanned aerial vehicles. The DHL Parcelcopter 3.0 was recently tested in a three-month trial in the Bavarian community of Reit im Winkl. This was the first time that a parcelcopter has been directly integrated into the delivery chain of any parcel service provider. The primary intended use of the DHL Parcelcopter has been to deliver to remote areas where infrastructure is poor or limited, making standard delivery methods overly lengthy. It will take a certain level of technical maturity before the field tests can be carried out in an urban area, such as Singapore, where aviation regulations and privacy concerns are two major hurdles.

What do you find is most enjoyable about working at DHL Express?

Definitely the culture and our people. We are very focused and we live by our attributes of Speed, Passion, Can Do and Right First Time. Our strategy is simple: doing things. And that means we work really hard to get the work done. Then we celebrate our achievements together and play hard as well. I think of us as a welloiled yellow machine where bureaucracy and power distance are low, and our people are cranking the engines.

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