Gauteng Business News

Send  Share  RSS  Twitter  06 Jul 2011

LOGISTICS: Nomadic Crystal Ball Predicts Business Cycle Turning Points


Recent Gauteng Business News

DHL, one of the world’s most immediately identifiable brands, may be known principally for its outstanding logistics and online tracking activities; yet it has a fascinating additional, largely latent, trump card up its sleeve.

Michael Druce, the South African operation’s Managing Director, explains: “The industry in which DHL operates is directly tied to the business cycle. Significantly, not only is it tied to the cycle; it acts as a barometer; a predictor that forecasts the future with a six month lag.

“Thus, whenever we experience a decline in demand for our services, that is an indication that the economy is going to dip some six months later; and vice versa for an economic uptick. This is a worldwide phenomenon.”

Druce says the DHL crystal ball was particularly telling, predicting as it did the debilitating 2008/09 recession some six months before it materialised.

And right now?

“We are on an upward cycle. Africa is starting to pick up – a little behind Asia, which started to turn around last year. In South Africa, it might be a little early to judge; but there definitely seem to be green shoots appearing here, and across Africa, in terms of economic activity.”

Druce should know. Born 53 years ago in Britain, he has been involved in the import/export/freight forwarding/logistics business all his working life. He joined DHL International in August 1986 as a gateway supervisor at the Hounslow, Middlesex operation and then progressed to service centre manager at Basildon, Essex.

Between June 1989 and March 1992, Druce worked as area general manager at DHL Sinotrans, a Chinese joint venture that based him in Guangzhou. In his three years there he grew the business to generate revenues of more than $1,5 million.

Druce’s next move was to New Zealand, where he spent two years as national services manager, followed by a year in Malaysia as national services development manager, from which post he was seconded back to Hounslow as user manager.

Druce got his first taste of Africa when, in October 1997, he was DHL International’s area operations manager for southern Africa based in Johannesburg. Right up until June 2002 he was responsible for the group’s management and development in South Africa, Namibia, Lesotho and Swaziland.

For the next six years, still in Johannesburg, he was vice president operations for sub-Saharan Africa, responsible for strategic direction, operational and services leadership across 47 countries.

Then to Nigeria as DHL Nigeria managing director, where he restructured the business by centralising many activities in Lagos while closing regional offices in the north and east of the country.

Now, back in South Africa, Druce’s primary role is to maintain and grow DHL’s market leadership position – “not an east assignment, given the need to constantly respond to rapidly and ever-changing customer needs”.

That the logistics industry is in a strong growth phase has been confirmed by the International Air Transport Association (IATA), with Africa having been identified as a particularly promising growth arena.

“It is an industry that is continuously modernising and as we modernise we become increasingly part of the global economy and, especially, part of the global economy that is growing fastest. South Africa, being in the forefront of African growth, is very much part of that exciting phenomenon,” Druce maintains.

He emphasises new technology as an integral part of modernisation.

“Indeed, technology in South Africa is advancing especially rapidly, particularly relative to where it was in the early part of the millennium. It is an advance that has helped extend our footprint all over Africa. Technology has facilitated the supply of real-time information – something we were unable to do in the late 1990s.”

Environmental concerns must clearly feature high on DHL’s list of business priorities. “After all,” says Druce, “as a group founded on transporting goods from one place to another, we owe it to the world to be as environmental-friendly as we are practically able.

“While there are probably bigger challenges in Africa – like poverty, education, health and empowering people – we cannot ignore the fact that our activities impact the environment.”

Aware of that responsibility, DHL has upgraded some of its aircraft in Africa to be more climate-efficient. The company operates climate-efficiency programme in South Africa and is looking at ways in which it can enhance that efficiency through reducing its dependence on traditional fuels.

Druce pinpoints climate-efficient vehicles as a big challenge because South Africa is a long way behind the United States and Europe in terms of being able to employ electrical or carbon-efficient vehicles. “But it’s something on which we are increasingly focusing.”

Because DHL is a people-orientated organisation, employing more than 800 people in South Africa, Druce is keenly aware of the importance of nurturing the company’s employees’ service ethic.

“Over the past three years we’ve done a lot of work, including ongoing research, to ensure that we have highly motivated and engaging employees. As we all know, if you engage customers and provide them with what they are looking for, success will follow.”

Druce’s nomadic lifestyle is suggestive of another upcoming career move. Not so.

“I’m here for the duration – certainly for a minimum of five years. I’ve been in Africa for 13 years. I have no plans to live anywhere else. My wife, originally a Singaporian, is now a South African citizen.”

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