International shipping and courier service provider, DHL, last week launched a new Boeing 737-400f cargo aircraft on the Johannesburg-Harare-Lusaka route. The large aircraft was necessitated by increased business demand. During the launch, Zimbabwe Independent (ZI) reporters Hazel Ndebele and Melody Chikono caught up with the company’s managing director, Jeff Phiri (JP, pictured), to discuss some of the challenges the company has faced and what needs to be done to attract more international companies to invest in Zimbabwe. Here are the excerpts:
ZI: In brief, tell us what the launch of this aircraft means to DHL and the country at large.
JP: We are really excited by this launch. It is our commitment to the country as we have seen optimism and seen our customers coming through. The launch is a culmination from our customers in various sectors who were frustrated about capacity as you are aware that our national airline does not have equipment. We then went to the head office and lobbied so it was not a thumb suck decision, it was based on market research that we did and, most importantly, it is customer driven.
The second aspect is what our DHL aviation vice-president for the Middle East and Africa, Malcolm Macbeth, said that there is growth on B to C business (business-to-consumer business), we are really growing exponentially. We think long term as DHL, that is why we do such investments, taking advantage of B to C opportunities. E-commerce is flourishing, people are buying goods online on websites such as Alibaba and Amazon and they need them to come here so imports are increasing. You took a tour of the aircraft and you saw how big it is, capacity is between 17 to 21 tonnes depending on the temperature.
Basically, that is a lot of shipment. We are an express company so we move parcels and documents, for us to fill in that space we need a specialised product which is called air cargo sales. This plane takes 35 minutes to get to Lusaka, so by road to Lusaka you will take more than eight hours and let alone can be delayed at the border, so we are creating convenience. It gives huge opportunities to the country not only to import but also to export. As a country we need export-led growth and that is what government is also focussing on, so we have given the tool to that. The fact that DHL had to acquire a bigger aircraft means that business is growing and it is showing a Zimbabwe which is open for business.
ZI: What are some of the challenges DHL has been facing as a business?
JP: Some of our challenges are similar to challenges faced by other businesses. For instance, we are currently battling with shortages of foreign currency. Our business is that we move goods from point A to point B and we rely on our customers who are importing or exporting, so if the nostros are low customers will not be able to pay suppliers.
The issue of nostros is something which the business community want to see resolved because it is the fuel for a functioning economy. We operate in an airport environment so we have challenges of theft. Recently, customs systems were not stable so our customers experienced problems with their shipments. As DHL our passion is to deliver customer experience so we deliver that, but if our partners like the Zimbabwe Revenue Authority have system challenges it affects the customer at the end of the value chain so that has also been one of the challenges.
The other challenge is that we have also seen an increase in the use of informal means, people are relying more on runners and so forth and that affects our business and it affects government too because there are revenue leakages. There are things like smuggling and the state is prejudiced of revenue.
ZI: DHL has been in Zimbabwe for 38 years now, what do you think should be done to increase the number of international companies in the country, especially seeing that these are essential in terms of economic development?
JP: That is a great question and what needs to be done is very simple. Capital and business is very concerned about inconsistences in terms of policies. Business wants certainty on policies so that is the first thing which has to be done. Secondly the operating environment must be conducive.
Business also needs incentives within the economy to be able to choose Zimbabwe over other countries in Africa. What we need the most is an effective one-stop shop. For instance, in Rwanda you can do most of your things online and in just a couple of days you would have registered a company and this is what international business wants. The other thing which is needed obviously is a solid financial sector.
ZI: What can you say have been the major factors that have spurred your growth over the years?
JP: We start with the people. We have invested lots of time and money in our people so that we have what we call certified international specialists. Our training is largely based on what we want to create, a fantastic customer experience. So we train every single staff. So it starts with people, then we look at investments, these can be buildings, vehicles and so on.
We also have a quite a fortune of a wide network. We have support from our colleagues in South Africa who believe in our vision and strategy, that’s why they keep supporting us and that’s why we are growing our footprint. If you drive to Harare, Bulawayo, etc. You see, at DHL, we want to give our customers convenience. Whatever we do at DHL we do it for the customers as they come at the centre of our operations.
ZI: What is the size of your footprint and what is the business outlook?
JP: We have over 135 retail outlets across the country and in terms of outlook, as long as we get the opportunity and the right location as we get as the right partner we will continue to grow. We have a mandate from our regulator, Potraz (Postal and Telecommunications Regulatory Authority of Zimbabwe) that we should be across the country so we must create tunnels and find DHL across the country.
Yes, we have our targets but what is happening is that we can’t give you the numbers because now we are focussing on quality and not quantity. We can have 1 000 retail outlets, the sky is the limit, but it’s quality that we want and they must be working.We can’t be opening them for the sake of glorifying DHL; we want quality. For Zimbabwe, it’s a sensitive discussion at the moment.
ZI: How safe is clients’ cargo with DHL?
JP: Good question. DHL prides itself for the security system that we have. At regional level we have a fully-fledged security team that operates all of Africa we have quality control centre and within there is a nerve centre where we can track goods as they move through the channels. Say goods are moving from Zimbabwe to China, we can track and see where exactly they are. So we can assure our customers.
Security is our second nature. The aircraft we use is ours so we are in control, it’s not like we are subcontracting someone else. So even if the goods go to Zambia or anywhere they are still with DHL and we are in control.
ZI: In case of unforeseen eventualities like fire and accidents, are your clients protected against loss?
JP: We have a product whereby customers can insure their goods against any forms of damage. Globally, we are covered by AON so they protect our assets and people.
Fact File: Jeff Phiri
- Managing director of DHL International Zimbabwe;
- Has held various positions in customer service, operations, quality, programme management in various countries;
- Is an economist and has previously worked in the Middle East, Asia and the Sub-Saharan African head office of DHL based in South Africa.
- Obtained his Bachelor of Science (Honours) degree in Economics from the University of Zimbabwe in 1994, and has a Master’s degree in Business Administration from the same institution; and
- Married with two children.