DPD Ireland CEO Des Travers talks to John Kennedy about how he has already spent €3m on preparing for Brexit and how this year’s consumer e-commerce splurge on Black Friday could be the biggest yet.
DPD is arguably the conduit through which most e-commerce in Ireland flows from the device in your hand or on your desk to the front door.
Presiding over this pulsating artery of logistics and fuelling Ireland’s digital economy is Glasgow native Des Travers who has lived in Ireland for more than 30 years.
“I’ve spent nearly €3m on Brexit so far. So I view it as being a disruption. But at the end of the day we are very good at adapting to change in Ireland”
Athlone-headquartered DPD Ireland is Ireland’s largest parcel delivery company. It reported a turnover of €91.5m last year and with continued investment, has succeeded in increasing parcel deliveries by 20pc year on year.
No stranger to innovation, DPD has just opened a “super depot” in Cork with an investment of €3m and prior to that the company revealed plans to create 150 new jobs as it invests €3.2m to electrify its Irish fleet of vehicles.
The company was established in Ireland in 1986 as Interlink Ireland. In 2008 it was acquired by the French post office La Poste and rebranded as DPD Ireland. Employing 1,145 people across 34 depots and with more than 500 pickup point locations, this year the business will carry over 22m parcels for delivery.
Its central sortation hub in Athlone operates the most up to date sortation equipment in the country and can process more than 21,000 parcels per hour. An investment of more than €33m in the facility over the last number of years has ensured that the business can sustain the fantastic growth rates experienced in recent years and that it is prepared for the future.
People, process, technology
Technology underpins everything and as well as a Predict messaging services that gives consumers an one-hour window for when the parcel will arrive or to change the time and location, earlier this week we reported how DPD invested in an AI bot called Barry that will talk in real-time with consumers about Brexit but also be ready for Black Friday on 29 November.
Peaks such as the Black Friday e-commerce splurge are very much on Travers’ mind when I meet him in Dublin and he explained that planning for such events are an all-year affair. Crucial to DPD, he explains, are DPD’s people who are the ambassadors for the company and leadership awards and 10 Days of Christmas initiative are devised to keep people’s morale up and maintain positive energy levels during the peaks.
Also top of Travers’ mind is the environmental challenge and reducing his company’s carbon footprint and he is laser-focused on finding a way to make electric vehicles viable when it comes to a world that increasingly buys online and expects virtually next-day or real-time delivery.
Travers left school at 17 and initially he trained as an apprentice welder.
“When I started as a courier driver for DHL, I was the 10th employee,” he recalls when he arrived first in Ireland almost 40 years ago, the son of Irish parents. “I was from Glasgow and I didn’t know one end of Dublin from the other. I was interviewed by an Australian and a New Zealander and they gave me a job to go out to the Naas Road. I didn’t know where the Naas Road was and had to figure it out. That was Ireland in the 1980s. There was no GPS or motorways.”
Among his jobs was collecting and delivering parcels to Bank of Ireland on Baggot Street every day.
While doing deliveries during the day, Travers studied at night to achieve qualifications to become a salesman. After being headhunted by Federal Express he was the company’s second employee in Ireland and basically sold out most of its available capacity. “We had a Fokker 50 aircraft that had capacity for 500 kilos and we had sold it out for three months. They said we don’t have the budget to give you another aircraft. The manager at the time Paul Murray saw something in me and took a leap of faith by making me general manager of the depot in Dublin and we grew that until FedEx pulled out of Europe.”
Travers then became general manager of Airborne Express, then Parceline and has been with DPD for the past 25 years.
In his almost 40 years in Ireland he has witnessed a lot of changes and the poignancy of emigration left an impression. “I was in Australia in the mid-1980s and I was talking to an Irishman who was driving a taxi and he hadn’t been home in a long time and because he wasn’t legal he couldn’t go home. He asked me to bring back a parcel for his family including a present for a child who was four and he had never met. I gave his gran back in Ireland the box and she was in floods of tears because it was the first solid communication they had with him that wasn’t a letter.”
Travers compares that time with the Ireland of 2019 and he sees a country that is punching well above its weight. “Now I have a son who is living in Melbourne and I talk with him every day by Skype and it is like he is in the next room.
“Most of the changes I’ve seen over the years, I think more than 90pc of the changes that we have seen in Ireland we can all be very proud of.”
DPD Ireland’s business is growing in double-digits, I asked Travers what is driving this.
“I would like to think it is the things that we are doing very well that is driving that. But there are also external factors that are playing in our favour too. We’ve been extremely aggressive in the market and is down to three factors: people, service and technology.
“We maintain 99pc service levels every day, every week, 52 weeks a year and it is going to be an interesting challenge coming up to the peak [Black Friday and Christmas] this year because the peak is going to be huge.
“We are the only people to have a one-hour window to have a notification to the customer. Every single parcel that leaves DPD involves a communication with a mobile phone of the end-customer. It’s about reliability and confidence. As long as we deliver 99pc service on top of that technology, then people know they can rely on DPD to deliver.”
Brexit be damned
DPD is a €91m a year revenue business with depots across the country and with much of those deliveries going to and from our nearest neighbour, the UK. I asked Travers how he feels about Brexit both in terms of the 31 October deadline that had loomed and now the “flextension” for a further three months.
“We’re not going to stop at double-digit growth. We’ve just invested €3m in our Cork hub and that will help see us through the peak that is coming”
“I’m quite frustrated with the whole thing, to be honest. People want certainty, businesses want certainty. I want certainty. We took a position on Brexit way back before March that carriers are going to be hit very hard, not just DPD, but any carrier that is moving parcels back and forth between the UK and Ireland are going to be severely impacted by Brexit.
“We do more than 64,000 entries a week and we have to manage that process with Customs and with systems that enable us to be in place.
“My only goal with Brexit is to make sure that I can keep my parcels moving and my customers happy whatever regime is in place in terms of taxes and duties.
“We are ready for any of the worst Brexit scenarios. If there is a good outcome I would welcome it for sure. I’ve spent nearly €3m on Brexit so far. So I view it as being a disruption. But at the end of the day we are very good at adapting to change in Ireland. There will be changes to shopping behaviours at first and instead of buying off eBay or Asos people will shop down the road. But then again, they want the choices that the websites bring and they’ll eventually go back to those websites again.”
Looking to the future of these islands, Travers says he has no worries for Irish people who he believes are adaptable and innovative. He recalls travelling back to Ireland from Edinburgh a few years ago on Christmas Eve and his flight was closed due to snow. He noticed a number of people with Irish accents who were also in the same predicament. Somehow, he managed to retrieve his rented car and drove across Scotland to get the ferry for Belfast. Upon his arrival at the ferry he discovered the same three Irish people – who happened to be teachers – had managed to get there before him. “I offered them a lift down to Dublin and asked them how they got across Scotland so fast. They said they got on the internet and booked three trains and two buses. And they got there quicker than I did in a car. And that to me represents the young Ireland. Because the young Ireland is tenacious, flexible and will work around any problem you give them. I could have hugged them. So yeah, I believe Ireland will survive quite comfortably post-Brexit.”
Electric dreams or electric reality?
Looking to the future beyond Brexit, Travers said that DPD Ireland is working to its own five-year strategy. “We intend to double volume in the next five years. So we are looking now at a view of not only what we need for today and tomorrow. But what do we need to do for five years to actually double our volumes. Traditionally our depots would have been quite small and there were a lot of them. Now we have moved to a strategy to become a mid-size to large-size depot player with depots in fewer places so we can achieve economies of scale and get the revenue and stability to allow our depots to do that.”
Part of that strategy has seen the merger of two depots in Cork. “We’ve done the same in Louth and Meath and four of our depots in Northern Ireland have done the same thing. We are scaling up for volume. We’re not going to stop at double-digit growth. We’ve just invested €3m in our Cork hub and that will help see us through the peak that is coming. And I’ll continue to invest in the business as long as I can continue to see the growth and the volume control.”
Another core element of DPD’s future is carbon control and climate change. “The head of La Post said that he wants to see us become the most carbon-friendly carrier in the world. And that’s a North Star for us all.
“There is no carrier, no transport business that has no option but to embrace this.”
The problem, Travers feels, is that the electric and hybrid vehicles that the industry ought to aspire to are to expensive. But at the same time, the industry doesn’t have a choice when it comes to the carbon taxes that are coming down the line.
“I opened Electric City in East Wall to deliver to the city via electric vehicles. I have four different electric vehicles on the go and I’m using this as a test bed to see what is possible because there is no quality research out there. Electric van manufacturers will say the van has a range of 120 kilometres, but if you put a ton of weight into it, it will only have a range of 60km. So we’re using Electric City to give ourselves the quality of data and experience and once we know and understand what is right we will expand it across the rest of the country. We have given ourselves a two-year window and by that time the technology will have moved on again. But currently, financially, diesel continues to win the argument.”
Travers believes the real issue is infrastructure. “If the Government wants to put 100,000 electric cars on the road, the next question is where are the 100,000 charging points? Once electric vehicles get to a point where you are absolutely comfortable walking out your front door and can go anywhere and come back again, then you’ve cracked electric. But if I’m constantly wondering if I can find a charge point and if I do find one and there are two cars ahead of me it is no use. I’d love to drive an electric car, but I am not going to stop for 40 minutes during my journey. I don’t have time.”
I ask Travers about the realities of managing a 1,145-strong workforce, especially in a business that has annual peaks. “I have the best technology that money can buy. I have the best service and I have the best people. I see my role as being the people champion of the business. While I have a fantastic management team, it is my drivers in full uniform, with clean vans and cheerful smiles who see the customers every day. I spend all my time evoking this message that this is the difference between ourselves and our competitors. I want customers’ experiences every time to be consistent. It doesn’t matter if you buy from Asos or Marks & Spencer, the only person you see when you buy something online is our driver.
“Our people strategy is about engagement, it’s about training, it’s about getting the right people in the first place. And when you get the right people it’s about making sure that they know their value to the business.
“We have TV screens in all our depots where we show the rivers the quality and standards and we reward drivers of the week every Friday morning.
“Does it work? Well our standards, our service and our quality tells us that it does,” Travers concludes as he gets back to planning for Black Friday.
Written by John Kennedy (firstname.lastname@example.org)
Published: 31 October, 2019