AVIATION INTERVIEW WITH JULIAN NEO POH CHOON
Managing Director of DHL Express Malaysia and Brunei
Having spent 21 years with the Deutsche Post DHL Group, Julian Neo considers it as a family with his work-life fully integrated with the people and professionals he works with. Understandably, the group’s culture and values of “connecting people, improving lives” have influenced how he lives his own life. Viewing his career journey within the group as amazing, equipping him with the opportunity to take up positions in three different markets and getting involved in projects in three others, the diverse exposure has served him well in his current role which he assumed since February 2019. Besides being blessed with great mentors within his company, the 49-year-old Neo has also previously worked with Fuji Xerox, Hong Leong Industries, Standard Chartered Bank and BMW Group.
Please share how DHL Express has continued to play a leading role as a global logistics company during the Covid-19 pandemic, especially in this part of the world.
As a company with a global presence, pandemic scenarios are an integral part of our continuous risk planning. Within Deutsche Post DHL Group, we follow a holistic management process that enables our divisions to ensure the best possible operations for the communities we serve through rigorous business continuity planning. The safety of both employees and customers occupies top priority. We have a dedicated task force that monitors the situation daily, coordinates with the relevant authorities, and provides the necessary information across all levels.
In managing our operational capacity and maintaining our speed of service, the volatility of trade is part and parcel of our day-to-day analysis and contingency planning. This ensures our preparedness for peaks and troughs in the different seasons of the changing market, including during this public health crisis.
In the early days of the Movement Control Order (MCO) last year, we took a hit in terms of transit time, but were able to recover to optimal levels within a matter of days. We do not take a one-size-fits-all approach towards our customers. Instead, we address their specific individual circumstances, needs and other considerations. We have developed a diverse offering of tailored-made solutions ranging from frozen perishables and modest fashion to next-day delivery of durians between Malaysia and Hong Kong.
What is your flight network like in order to cope with the exponential growth in shipment volumes since the pandemic?
We have made a number of extensive investments in our global network. Owing to growing demand for logistics expertise resulting from the expanding item volumes in the e-commerce market, DHL Express invested more than RM4.8 billion last year in its global hub and gateway network as well as in new aircraft.
We were the first to order 12 fully-electric Alice eCargo planes in our drive towards zero-emissions logistics. Our investments in alternative and sustainable engine technologies, for example, electric and hydrogen fuel cell, have empowered us, our customers, and our partners to significantly improve our ecological footprint.
What is the market response after your company’s recent announcement of its annual price adjustment averaging a 4.9% increase effective 1 January 2022?
DHL Express adjusts its rates yearly, taking into account local and international inflation rates as well as currency dynamics which affect all businesses besides administrative costs related to regulatory and security measures. Depending on local conditions, price adjustments will vary from country to country and will apply to all customers where contracts allow. The adjustment also allows us to further invest in the infrastructure network and strengthen our resilience against crises and provide the needed capacity growth due to rising customer demands.
Please share the expansion of your hubs and gateways, including the use of state-of-the art aircraft, vehicles and other advanced technological devices.
Our parent company Deutsche Post DHL Group invested more than RM4.8 billion globally to enhance our infrastructure and network last year. In Malaysia, we invested RM11.3 million on new additions to our vehicle fleet. A cumulative RM7.4 million went towards the overhaul of equipment encompassing x-rays, courier and warehouse scanners as well as and weighing appliances in addition to the refurbishment of our 11 facilities nationwide.
Maintenance was not the sole item on our agenda as our Seberang Prai (RM13 million) and Kuala Lumpur Gateway (RM197.8 million) locations also moved to bigger premises to cater to the growing communities’ needs. Through these upgrades, we ensure sustained operational excellence so that we can continue fulfilling our commitment of connecting people and improving lives.
How do you view the prospects for your industry in the next few years?
While several countries are making efforts towards economic recovery, trade lane closures, reduced cargo availability, and increased border processing times continue to be prevalent issues across the logistics industry. Businesses will definitely start to think more carefully about their supply chain and how they can make it more resilient. For example, by spreading production across several regions instead of having just one factory in one country to improve lead time for their inventory.
Generally, a multi-pronged manufacturing site strategy is a practical and rational supply chain approach as it spreads risks and side steps the potential pitfalls of supply chain failures and uncertainties if all our eggs are in one basket. Trade will play an important role in the recovery once this is all over and as its backbone, the logistics sector would be crucial in ensuring the world keeps moving.
Can you elaborate on the new changes that will be taking place?
I foresee automation will claim a larger part of our traditionally labour-intensive roles. Non-customer facing tasks such as sorting and warehousing are increasingly reallocated to be controlled by programmable robotic systems as well as artificial intelligence (AI). Technologies deployed at DHL are never meant as a replacement but rather to complement our employees and increase our operational efficiency. The aim is to ease our staff’s workload in order to free them up for less monotonous and manual tasks, granted that knowledge, experience and instinct cannot be replaced at the helm of our major decisions.
The prolonged period of restricted living conditions has further skewed consumer behaviour towards e-commerce compared to brick-and-mortar businesses. The greater demand for orders and speed may soon eclipse the capability of online retailers, thus presenting an opportunity for logistics providers to include fulfilment in our portfolio.
We could also see higher concentration of logistics activity catering to pharmaceuticals, fast-moving consumer goods, non-perishable foodstuffs and other sectors that have remained relatively profitable throughout the Covid-19 crisis.
What are the key elements that will drive your company’s growth in the fast-transforming digital era?
Digitalisation has always been one of the top priorities of our business with Deutsche Post DHL Group committing billion until 2025 to step up transformational initiatives designed to enhance customer and employee experience as well as improve operational performance across all divisions.
Efforts are underway to comprehensively modernise our information technology systems, integrate new capabilities and offer staff targeted training. Global Centres of Excellence are being established to centrally develop key technologies like data analytics, internet of things and autonomous vehicles for logistics use.
In Malaysia, the Covid-19 outbreak and subsequent MCOs have accelerated our digitalisation journey. Where previously a signature would be needed, we have implemented contactless pickup and delivery to mitigate infection risk. We also successfully rolled out our WhatsApp service, DHLontheGo, which allows shipment booking, tracking and enquiry all through the messaging app. Warmly welcomed among our clientele, we expect them to be in demand well beyond the crisis.
We have also deployed a new system called the Advanced Quality Control Centre (AQCC), which utilises the latest technologies in AI, big data referencing and routing as well as automated systems. AQCC provides the capability to monitor in real-time 100% of our shipments and movements efficiently. Robotic process automation has also helped us to streamline vital processes, automate time-consuming repetitive tasks, and enabled our teams to become more productive.
Work apart, how do you unwind and what are the things that you find joy in?
Two things that help me unwind are a good holiday and time spent with loved ones.