DHLs views on freight logistics in Europe

Graham Inglis, CEO Region Head Northern Europe, Middle East & Africa DHL Exel Supply Chain Freight Logistics Conference 5 October 2006, Brussels

A Global Player with Strongly Positioned Divisions

MAIL

EXPRESS

LOGISTICS

FINANCE

Germany Biggest provider of mail services in Europe Delivering mail to about 40 million households in Germany More than 71 million shipments per day

Worldwide No. 1 in cross border express services Strong presence in more than 220 countries and territories More than 4.2 million customers worldwide 120,000 destinations served

Worldwide No. 1 in global contract logistics No. 1 in global air freight No. 1 in global ocean freight Strong customer base (50% of Forbes 500 companies)

Germany Leading retail bank in Germany 12.3 million customers 17.2 million savings accounts USA Worldwide finance services for logistics industry

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Customized End-to-End Logistics

Offering of logistics service across the Supply Chain through a wide range of products allowing complete solutions that are tailored to our customer needs

Suppliers Inbound Logistics

Distribution

Production Supply Logistics

Distribution

Sales Channel

Value-Added Services After Sales Logistics

End User

Manufacturing Logistics

Distribution Logistics

Reverse Logistics

Industry specifics define the product portfolio Modular product design allows flexible combinations Supporting IT architecture provides integrated process management
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Delivering State-Of-The-Art Logistics for Leading Companies

Technology Aerospace Automotive Industrial Chemicals Healthcare Consumer Fashion Retail
8 of the top 10 companies 13 of the top 15 companies 10 of the top 10 companies 6 of the top 8 companies 10 of the top 12 companies 12 of the top 13 companies

14 of the top 15 companies 10 of the top 12 companies 5 of the top 7 companies

* based on the Business Week top 250 companies, December 2005, excluding financials, insurance, media and transport.

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Global Combined Coverage

Contract logistics and freight forwarding Freight forwarding only No presence

Operations in all continents Facilities in over 3,000 locations over 1,600 in EMEA Over 148,000 employees worldwide over 94,000 in EMEA
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Our Commitment to Delivering Value to Our Customers

Globalization

Increasing competition

Supply chain complexity

To meet our customers needs

Specialized industry requirements

Trend towards global outsourcing

Continuous cost and service improvement

We will provide our customers with

Industry expertise

A global supply chain partner

Operational focus

.. to enable our customers to

Focus on their customers, and meet, or exceed, their needs

Stay ahead in competition

Deliver the required service and cost levels

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The Shape of the new Global Supply Chains

International Supply Chain

Manufacturing & Supplier Services VMI Kitting Supplier Logistics Co-Packing Procurement Sourcing Services Origin Management Origin Management Vendor Management PO Management CFS Operations Origin Trucking Value Add Services Transportation Road Rail Sea Air Transportation Management Destination Management DC Bypass Direct to Store Processing De-Consolidation Demurrage Mgmt Franchise Logistics In Country Logistics Warehousing Reverse Logistics Shared User Facilities Cross-Dock Transportation Mgmt Delivery Services

Photo

Photo

Photo

Photo

Supply Chain Visibility

Global Trade Management Inventory Management Inventory Financing Demand Planning and Forecasting

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..and what happens if you get it all right?

Reduce inbound logistics costs by 8-15% Reduce Inventory Weeks by up to 15% Reduce delivered product costs by ~ 20% Develop a more responsive supply chain and reduce Lead Times significantly Reduce destination costs by up to 12% Increase Promotional Compliance across the supply chain

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Most of DHL contract logistics activities in the EU

Split of revenue by region

Americas 20 % Asia Pacific 5%

UK / Ireland 31 %

Mainland Europe 44 %
DHL Exel Supply chain - 2006/Q1

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Global dimension of logistics operations

Highly competitive global logistics market, so its crucial for the EU to Facilitate logistics operations in Europe and beyond Prevent competitive distortion vis--vis non-EU companies

27 large warehouses for replenishment

524 available storage points for time critical service

Multi Modal Transportation

Three regional logistics call centers

One Global IS Infrastructure

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Integrating a logistics perspective into the EU transport policy and more

Balanced security measures for all transport modes and the supply chain Application of the balanced approach principle for ensuring sustainable logistics transport operations Fair access to the international air transport market Harmonized and flexible road transport market conditions Infrastructure solutions for promoting intermodal transport One-stop administrative shopping for customs clearance Interoperable standards for global ICT logistics applications

Source: DPWN Corporate presentation, March 2006

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Thank You for Your Interest and Time

For more information go to www.dhl.com

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