DHL Franchise - Do They Franchise in the UK?

05/01/2019 18:00 | Start a business

dhl franchise

The red and yellow of the instantly recognisable DHL logo can be seen being cycled, driven, sailed, and flown around nations across the world. The business is one of the most prestigious courier brands in the industry and receives a great deal of interest from potential investors. Here, we take an in-depth look at the company, its history and whether it offers franchising opportunities.

Who is DHL?

DHL is a German logistics company that offers courier and postal services to clients across the globe. As one of the most popular and well-known logistics brands on the planet, DHL is the go-to courier for both private individuals and businesses. It is now the largest logistics business in the world, and it transports cargo to most national markets. Unlike many other providers, DHL offers services to Cuba and North Korea, and it is the only means of the US Postal Service getting their mail in and out of war zones like Afghanistan and Iraq.

DHL also operates a substantial aid, relief, and humanitarian division. This sees its employees, equipment, and transport provide their services to people and areas that need them most. It is most commonly utilised in the aftermath of natural disasters, where local infrastructure is likely to have been damaged, and specialist expertise is required to get desperately needed supplies and equipment into the affected area. To do this, DHL has established a set of disaster centres around the globe, each of which can help respond to a disaster that occurs in their region.

A brief history of DHL

Larry Hillblom of California, USA, established DHL in 1969. During his time at Berkeley studying law, Hillbolm took on courier work for a local insurance firm. This saw him ferrying packages between Oakland International and Los Angeles International. Soon, Hillblom and an associate, Adrian Dalsey, decided to expand on the idea and began transporting packets for other companies. Bringing on board Robert Lynn as the third and final partner, the three entrepreneurs combined their initials to come up with a name and DHL was born.

As the business grew, they brought more and more couriers on-board, allowing them to focus on the management and expansion of the organisation. In these early days, much of the work centred on traffic between Hawaii and California, though this was soon to change. In the early 70s, DHL went international. At the time, they were the only logistics company in the US that offered an overnight service. Throughout the 80s and 90s, the company grew and grew, adding to its fleet of diverse transportation options and servicing an ever-increasing number of markets.

In 1998, Deutsche Post started to purchase shares in DHL with the intention of owning a controlling share by the mid-00s. However, this process was completed by 2001 and, the following year, DHL merged with Deutsche Post's Express services. Since then, the company has made significant investments in its air transport services and has also made moves to switch many of its vehicles to more environmentally friendly alternatives. In 2009, DHL abandoned the US market to its two main competitors, FedEx and UPS, as its status as a non-US based business made it impossible to compete domestically.

Whos in charge at DHL?

Deutsche Post owns DHL the business that emerged from the privatisation of the German postal system. The organisation is headquartered in Bonn, Germany and is considered the largest postal delivery service in Europe. While DHL CEO Ken Allen oversees the company's services, Deutsche Post is run by its CEO, Frank Appel. Both individuals have considerable experience in the logistics sector, with Allen having worked for DHL for over 30 years and Appel joining the company in 2000.

How has DHL performed financially?

DHL employees approximately 350,000 employees around the world and has a presence in most international markets. In 2017, the companys operating profit increased 7.2% to 3.74 billion. Over the same period, gross profit jumped 5.4% to 60.4 billion. Overall, the business struggled when it came to air and ocean freight (primarily due to increases in freight rates in these areas) but made up for this with growth in its e-commerce arm.

DHL courier franchise UK

DHL does not currently offer franchising opportunities. However, existing courier businesses can apply to become a DHL agent in the UK. This involves working alongside DHL to deliver its services to customers in your region. A commission is paid on each parcel or package that is accepted and processed. Once customer parcels are collected, DHL will arrange for it to be picked up by one of their vehicles and transported using its own logistics network. This means that DHL agents generally act as a collection point for the larger company.

DHL franchise UK

The UK is a large market for DHL, and there are considerable opportunities for any organisation that can work alongside the company to bring its services to a broader audience. However, the fact that DHL has not adopted the franchise model means that it's not possible to invest in the business directly. Instead, entrepreneurs who want to benefit from the DHL brand and the size of its logistics network need to find a way to offer specific routes or services at a lower rate than the company can currently operate them. DHL is no stranger to outsourcing collection and delivery services and makes regular use of smaller companies that can provide local services at an affordable rate.

DHL franchise for sale

Alternatively, entrepreneurs could consider investing in a competitor that does offer franchise opportunities. While there are no franchises that can compete with DHL in terms of size and brand reach, there are many that provide investors with a profitable business model with great potential for growth. For instance, both World Options and InXpress are looking for new franchisees to grow their network and require relatively little investment to get started. Speedy Freight and Diamond Logistics also benefit from carefully considered and proven business models.

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