DHL Express India, the largest courier service provider in the country, has seen a consistent rise in economic activity through the lockdown months and expects this to reach pre-COVID-19 levels by the first quarter of 2021.
Over 90% of DHL Express customers are now operational. And they are operating at 90% of their capacity.”~RS Subramanian, Senior Vice President and Managing Director, DHL Express India
With over 60,000 customers in India, DHL Express has marked its presence across all major sectors, including large, medium and small enterprises, giving it an inside-out view on the country’s economic activity.
This comes as a commendable progress since July, especially when it comes to capacity utilisation. At the time, over 70% of DHL Express customers were operational and all were operating at an average of 50% or more, he informed.
The senior executive informed that the company, that handled a million shipments a month prior to the pandemic, is slowly, but steadily approaching the mark.
“Overall, the economic activity has been higher than normal from August onwards. Globally, the first two quarters were good for DHL Express. The third quarter has been excellent,” Mr Subramanian said.
While the Indian arm is not listed and does not disclose financial information, the German parent – Deutsche Post DHL Group, posted a 4.4% year-on-year growth in revenues, and a 46% increase in earnings before interest and tax, in the third quarter.
DHL Express recorded a 14.6% gain in revenue and a 65.9% year-on-year jump in operating profit.
The boost has come from a “very good Diwali” with exports and e-commerce sellers doing better than others, he said.
The senior executive’s observations run in line with the overall trend in economic growth. Although India’s GDP contracted by 7.5% in the second quarter, it was lower than expected, especially after the record 23.9% dent in the first quarter.
At the same time, the product mix of what DHL Express transports has mixed. “The volume of documents has gone down, probably because of the focus on digitisation. Also, we are carrying heavier equipment,” said Subramanian.
Pharmaceuticals and life sciences companies were doing “extremely well, and not surprisingly.” Engineering and manufacturing companies have also seen a rise in volumes, and the auto sector has made a strong rebound.
“Most of the small and medium scale enterprises are back in the trade,” said the India head of DHL Express.
On the other hand, fashion and retail, which in pre-COVID times were a major part of the product mix, have been slow to recover. “These two segments are getting back, but earlier they were very big,” said Mr Subramanian.
The overall picture as he puts it, brims with the possibility of economic activity to continue with the improving trend, with most sectors expected to hit their pre-COVID-19 levels in the first three months of 2021.