CEO interview: DHL Express’ UK CEO Phil Couchman
In this interview with Phil Couchman, the boss of small business supplier DHL Express’ he talks exports and the importance of being online
“It’s only a very short step from start-up to exporting,” expounds Phil Couchman, CEO of parcel delivery giant DHL Express UK and Ireland.
He’s on a fact-finding trip to China when Startups speaks to him and is keen to espouse the benefits of trading internationally, for even the smallest of companies.
Clearly, there’s a benefit his business is likely to derive from such activities and in the run-up to Christmas demand led to the business employing an extra 2,000 people. But any owner-manager will know it’s ultimately a mutual one if their business acquires new, untapped revenues.
Right now the UK is a net importer. So, as a nation, we import more than we export. In 2012 the value of exports reached a record £299.5bn, but imports rose faster to £407.4bn, meaning a difference of £107.9bn. The deficit, government statistics show, came down in 2013.
However, government research suggests that 20% of companies exports and increasing that number to 25% would add £36bn to the UK economy. Right now, exporting is responsible for around 30% of the UK’s GDP.
Research also showed businesses are twice as likely to be successful if they export internationally rather than only operating in their domestic market. It won’t work for everyone, but global demand for British products and services is there if you go looking.
Predictably, Couchman, who runs the UK Express arm of the Deutsche Post DHL group, which generated revenues of €55bn in 2012 and recently made headlines for the successful test flight of a delivery drone the ‘Paketkopter’, is keen.
But he’s no different to his peers at UPS, FedEx, TNT and others offering express, sea or air freight services who want to be the fulfilment partner of choice for growing businesses.
On an overseas trade mission
In fact, he’s no different to the government or the nation’s economists who all recognise the sizzling opportunity to grow the UK’s GDP.
“Boosting exports must be a national economic priority, particularly when it comes to diversifying our exports towards faster-growing economies outside the EU,” says chief economist at the British Chambers of Commerce David Kern, who adds more resources in areas such as trade finance, insurance, and promotion are required.
It was why the 2012 Autumn Statement allocated an additional £70m for both 2013/14 and 2014/15 to recruit more international trade advisers around the country and to expand the Trade Access Programme (TAP) and the Overseas Market Introduction Service (OMIS). The British Chambers of Commerce too has become an increasingly important conduit for local businesses exploring other markets.
Following the largest ever trade mission to China in November 2013, led by prime minister David Cameron and featuring more than 120 British companies (of which around 60 were small and mid-sized), the government announced a headline-grabbing £5.6bn of deals.
Much of the eye-catching figure was swallowed up by the huge £4.5bn deal signed by Jaguar Land Rover. But there were others, such as award-winning Manchester-based restaurant Sweet Mandarin, which also produces gluten, nut and dairy-free sauces. The small manufacturer sealed a £6m deal to sell Chinese sauces to the Chinese market. Ice and the Inuit spring to mind.
Moulton Bicycles, a Wiltshire-based manufacturer agreed a £500,000 distribution deal for the order of a special model of its bicycle for sale in China only.
And there were many more besides, a good number of which do not involve the transfer of tangible goods, thereby illustrating the possibilities for those who think other nations only want to buy products. Consultancy and professional advice are just as exportable if businesses know where to look.
And, says Couchman, there’s a large degree of re-export from the Far East. “They arrive here, are rebranded and refabricated in some cases, sold online and then exported. It’s a hub activity we see in fashion in the Midlands.” Hugely successful and eponymously-named pottery business Emma Bridgewater is a customer, he adds, and her company’s shipments reach all corners of the globe.
Cameron’s visit to China will have done no harm, believes Couchman. “It was symbolically important but I know he also signed various trade agreements and negotiated a way for more streamlined trade between the UK (and Europe).”
The need to get online
The first thing start-up or early stage businesses need to do in order to export, says Couchman, is get online. For many reading this it’ll sound like teaching your granny to suck eggs, but the simple fact is many small businesses still don’t have a website, let alone a transactional one or a mobile-optimised site.
“If we can get to the tens of thousands of businesses and cottage industries that are still a bit mired in the past,” he says, “the common thread will definitely be that they haven’t invested in their website.”
On a recent visit to Scotland, Couchman met with Taylor Bowls, a company that makes bowling balls – and has been doing so domestically for 100 years. The business “decided to crank up their website”, says Couchman, and has found a big new market in Australia.
For online retailer Wiggle, which sells most of the cycling related products you could possibly imagine, the detail is crucial. “I was at the studio in Portsmouth. They take pictures from all angles, such as photographing the gear mechanism. It’s that total attention to detail.”
Delivering a package for small business
The ability to deliver products – in DHL’s case weighing less than 70kgs – in two or three business days has opened up the other side of the world. Furthermore, says Couchman, a small business doesn’t have to contend with voluminous amounts of paperwork – or even the delivery logistics, which for many is part of the customer service package today.
“The investment we have put and continue to put into residential – pre-alerts through SMS and emails and simplifying the customs aspect so customers don’t have to get involved in the duty part – is substantial.”
With letters of credit, customs duty handling included, and customers not having to collect packages held up at airports, express services – for a price – are simplifying a process that holds fear around complexity and resourcing for many small firms, argues Couchman. By delivering to the door there’s also no need for wholesalers or distributors in the customer’s market.
Moreover, he asks why a small company wouldn’t start trading overseas in the connected age. He admits there are concerns surrounding fraudulent orders, dealing with returns, spending the time required to make a website easy to use for customers overseas, and the potential for legal or cultural challenges.
He also admits there’s a perception among customers that the export of consumer commodities to China is difficult, particularly in gaining customs clearance for shipments, but claims – having walked through the process while there – that for shipments valued at less than 5,000 rmb (roughly £500) “it’s an informal clearance and really simple”.
Orders valued over 5,000 rmb go through a formal clearance similar to other countries. “As far as we’re concerned China’s really open for business in B2C.” Instead, Couchman is keen to talk of the “happy confluence of circumstances” the UK possesses.
“The sophistication of online trading is head and shoulders above anywhere in Europe and probably only second to the US. The currency is favourable for buying things here than other currencies. And ‘Brand Britain’ is very popular in lots of parts of the world – in China particularly and other parts of the Far East.”
He points to historic textiles business Wedgwood, having visited its plant in Stoke-on-Trent. “The premium they can command for a plate that says ‘Wedgwood’ versus ‘Wedgwood Made in England’ is substantial. For one, the brand speaks for itself. Two, it’s manufactured here. It’s almost the perfect storm for what the UK has to offer.” So what, Couchman wonders, are you waiting for?