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Customs regulations present a few unexpected challenges to DHL's operations in Egypt - Daily News Egypt

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Customs regulations present a few unexpected challenges to DHL’s operations in Egypt

In an interview with Daily News Egypt, Nour Suliman, Chief Executive Officer of DHL Express Middle East and North Africa,focused on the future plan of DHL in Egypt, and the challenges it has to overcome to realize the growth targeted in 2016.   What does your company predict for the investment atmosphere of the Egyptian …


In an interview with Daily News Egypt, Nour Suliman, Chief Executive Officer of DHL Express Middle East and North Africa,focused on the future plan of DHL in Egypt, and the challenges it has to overcome to realize the growth targeted in 2016.

 

What does your company predict for the investment atmosphere of the Egyptian market in 2016?

We feel pretty good about it. We have seen foreign investment increase significantly in Egypt over the past couple of years, in addition to the undeterred plans of the government to expand and the infrastructure and new projects. All of this presents an optimistic picture of the atmosphere in Egypt.

What is your view on the shipping business so far in 2016?

Generally speaking, the global economy is going through a rough patch at the moment; there is global uncertainty with many issues contributing to this—including oil prices, currency fluctuations, and instability—but Egypt, in my view, will ride out the storm. As a result of the work that was done within the last couple of years, between 2014 and 2015, we expect Egypt to continue to grow, albeit at a more moderate rate due to the global economic situation.

Photo Handout to DNE
Photo Handout to DNE

What do you think will be the impact of the growth of local e-commerce on the shipping sector?

Local e-commerce has been successfully accelerating. It started off at a low base, so the numbers are still low, which means we do not yet feel the effect on our sector, but it is speeding up and we expect that it will soon double in size. E-commerce also presents an opportunity for local products to reach international markets; if the product can compete at international market standards, and since we have an international express service provider, there is no reason why we should not soon be able to shop Egyptian products at a click of a button.

What is the size of DHL’s investments in the Egyptian market? What are your plans to increase them in 2016?

We have invested significantly in growing our business in Egypt. In 2014, we opened our brand new state-of-the-art facility and office at the Cargo City in Cairo International Airport, with an investment of €40m. We have also recently expanded our air network by adding a new destination for DHL aircraft into Cairo, and expanded the size of our fleet significantly. In addition, we recently invested €1m in a brand new office in Alexandria that we will open later this year, and which will help improve our service even further.

How does DHL view Egypt in terms of the shipping sector’s growth rates among Middle Eastern countries?

We think it is quite good. We think Egypt is doing quite well; it is actually one of the best countries at the moment, in terms of growth performance in this region. Despite some of the recent events and economic turbulence, Egypt remains fairly buoyant and remains one of the most promising economies in the Middle East.

What is the size of your fleet in the Middle East region, and in Egypt in particular?

Overall, we have 11 dedicated aircraft operating in this region and 1,900 vehicles across the MENA region. We also have two main hubs serving our global network that are located in Bahrain and Dubai. In Egypt, we have more than 100 vehicles and over 32 service locations including our latest business concept of having mobile service offices that reaches new customers in different areas.

What are the challenges DHL faces in the Egyptian market?

Mainly changes to customs regulations, as they present a few unexpected challenges to our operations. Our business depends on our ability to clear shipments on time, and as per our promise to our customers. We manage to do that by regularly updating and educating our customers on new processes and regulations required. Rapid or sudden changes might result in a delay of our process as we struggle to keep our customers timely updated with the latest regulations and requirements.

Photo Handout to DNE
Photo Handout to DNE

How did the dollar crisis and the Central Bank of Egypt’s regulations affect your business?

We faced some issues with transferring funds to our network. In addition to that, the devaluation of the local currency presented some challenges. However, the market is still growing even though the percentage by which it is growing is very moderate. In 2015, the express logistics market grew by a modest 1% over 2014 due to these factors, but we expect that growth to increase in the near future.

What are the competitive advantages that give you an edge over competitor companies?

We deliver the best quality of service, and the lowest transit times. But, more importantly, it is our attitude towards our customers that gives us the edge. We place customers at the centre of everything we do; we work to be closer to our them so we open new service points, and make sure we are available in areas where they need us the most, so you find us in Port Said, and in Ismailia.

We upgrade and update our services and technologies regularly to ensure we provide top-of-the-line quality, for the benefit of our customers. We train our staff regularly, and make sure they embrace the DHL culture, so we all speak the same language anywhere you go around the world.

What are the problems the company faces in the Egyptian market with regards to infrastructure?

We face some issues in terms of traffic increase, which causes delays in our routes, and therefore increases the cost of each stop; we manage to handle that by planning our routes ahead and developing contingency plans that are then put in effect accordingly. There is also a gap in the logistics infrastructure that would normally allow us to expand and grow our business, but I think this might change soon as the government’s development plans are put to action.

What types of cooperation do you have with the Egyptian Post authority?

We have a mutual agreement to bank on each other’s strengths. So, when it comes to international shipments, they rely on us to successfully make the delivery. Additionally, we are currently discussing new partnership projects with the newly appointed CEO that will soon be announced.

What is your market share in Egypt?

We hold over 50% of the international express market in Egypt, and we have no intention of slowing down.

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https://wwww.dailynewssegypt.com/2016/04/05/changes-to-customs-regulations-present-unexpected-challenges-to-dhls-operations-in-egypt/
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