Deutsche Post plans new investment as ecommerce booms
BERLIN – Deutsche Post DHL set a new target for an operating profit of 5.3 billion euros ($5.77 billion) for 2022 and said it would invest heavily in areas like warehouse automation and analytics as it seeks to keep up with fast-growing ecommerce.
Laying out its strategy for the next five years, the German post and logistics group also confirmed its guidance for an operating profit of 5 billion euros in 2020.
Given the current uncertain economic environment, finance chief Melanie Kreis said the company’s new guidance would cover a three-year period and be rolled forward annually.
For the 2020-2022 period, the company plans to invest between 8.5 and 9.5 billion euros in total as it overhauls its IT systems and retrains staff, applying data analytics to help it better plan delivery routes and predict parcel volumes.
Included in that figure will be 2 billion euros for digitalization, with the expectation that this spending will generate an annual benefit of more than 1.5 billion euros by 2025.
“We need not reinvent ourselves. We will digitalize,” said Chief Executive Frank Appel.
The new strategy is based on the assumption that air freight will grow 1-3% a year, ocean freight 2-4% and road freight 3-4%.
(Content & Photos Syndicated Via Reuters)
(Reporting by Emma Thomasson; Editing by Tassilo Hummel and Michelle Martin)