International trade is by no means a new phenomenon. Records show that as long as 5,000 years ago, historical civilizations were actively trading goods across continents. Prominent among them was the trade in spices – high value, luxury materials that were prized and coveted across many cultures. The spice trade shaped the development of international cultural and economic ties right through to modern times and gave birth to many of the major trade routes that still exist to this day.

In recent years, e-commerce has fundamentally changed the way we trade: every day, millions of purchases are made online, and truckloads of shipments are being delivered to consumers’ homes. However, even this megatrend is currently undergoing a further revolution – consumers are increasingly becoming more comfortable with the idea of buying from retailers and manufacturers abroad. In fact, every seventh online purchase is already conducted as a cross-border transaction.

At DHL Express, we know from experience that the opportunity of going global is out there for the taking for all types of retailers and manufacturers – small or medium-sized, experienced in or relatively new to online sales. E-commerce has profoundly changed the entire parcel and express industry ever since, shifting from a pure B2B focus to also addressing B2C-related requirements. With this, the industry finds itself today in the position of having to serve two important customers at the same time – the e-tailer as the shipper and the discerning consumer whose service expectations are increasing at an ever higher pace. The e-commerce paradigms sometimes even seem contradicting: cost and – not versus – convenience, volume and value, fast movement and constant improvement. As a result, e-commerce has turned the parcel and partially the express industry into an entirely different animal compared to what it used to be a decade ago.

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InBUSINESS spoke with Janet Cox, Head of Field Sales at DHL Express Ireland, to find out how businesses can maximise their growth potential by developing a strong e-commerce strategy, and why it rings true for an SME just as much as for a large corporation. Click here to read more.

DHL Express in Ireland reports that SME exports to UK remain strong despite Sterling decline and Brexit fears

• DHL report that volume of exports from Irish SMEs to UK continues to grow despite Sterling decline and Brexit uncertainty
• The report indicates that some smaller exporters have been ‘squeezed’ out of the UK market in certain sectors
• Data also shows that SMEs who export to UK are successfully diversifying to other non-UK markets, which is a positive development

Dublin, Ireland, December 14, 2016: DHL Express, Ireland’s leading international express services provider, today reported on the results of a detailed study of their customers’ export trading from Ireland to the UK.  “We all know that the decline in the value of sterling has created pressure on Ireland’s exports to the UK,” said Bernard McCarthy, Managing Director DHL Express Ireland.  “The CSO has reported that the overall value of Ireland’s goods exports to the UK has declined by approximately 5% in the nine month period to the end of September.  However these high-level trade statistics don’t always tell the full story, so we decided to analyse our own data in some detail to gain further insight into how SME exports to the UK are performing.”

“At DHL Express we have over 2,000 customers who export to the UK – so we have a large sample size of exporters across the full range of exporting sectors,” continued Bernard McCarthy.  “As part of our analysis we have excluded our multi-national customers and other high volume exporters whose individual trading may distort the overall picture.  This leaves us with a large sample of Irish SMEs exporting to the UK, so the trading dynamics of these companies provides an excellent insight to the overall SME exporting experience.”

The results are very interesting and a lot more positive than one might otherwise expect to see.  In the period from January to June this year (the Brexit vote occurred on 23 June), the volume of exports to the UK from these SMEs grew by a very encouraging 8.7% compared to the same period last year.  Despite the further decline in the value of sterling since the Brexit vote, in the subsequent five month period from July to November the export volume has accelerated by a further 5%.”

Whilst there is strong growth in the overall volume of SME exports to the UK, the analysis does also show that some SMEs have been forced out of the market and there has been a decline of 4% in the number of SMEs exporting to the UK in the period since the Brexit vote.

The general consensus is that in the medium to long term, the best way to mitigate the risk that Brexit represents for Irish exporters to the UK is to diversify exports to new markets outside of the UK – and the DHL analysis indicates that this is starting to happen in practice.

“If we look at the same group of over 2,000 SMEs exporting to the UK and we examine the other markets they are also exporting to, we can see that the rate of growth to these other (non-UK) markets is increasing at a faster rate since the Brexit vote.  The volume growth to these markets has increased from 4% prior to the Brexit vote to 11% in the period since the vote.  This shows that SMEs exporting to the UK are diversifying to other markets which can only be a positive development in the longer term.”

Within this analysis Germany represents the biggest European market – and the fastest growing at 15%. The other main growth markets in Europe are Spain and France.  Outside of the EU the main markets that SMEs are successfully diversifying to are the USA (+34%) and Australia (+23%).  The USA growth is supported by a favourable euro to US dollar exchange rate.  There has also been a change in 2016 to US customs regulations which allows goods to be imported into the USA up to a value of $800 (previously $200) without incurring any import duties and taxes.

“Whilst Brexit clearly represents a challenge to SME exporters to the UK, our analysis shows that Irish SMEs are not abandoning the UK and indeed continue to grow export volume into this key market – whilst at the same time diversifying into new global markets.  This can only be a positive in the longer term,” concluded Bernard McCarthy.

ŸFlexible shipping options designed to enhance the customer experience for online shoppers

November 30, 2016: DHL Express, the world’s leading international express services provider, today announced the launch of On Demand Delivery, a new service that allows shippers and receivers globally to select from a range of standardized delivery options.

With On Demand Delivery, shippers can choose to activate specific delivery options and have DHL Express proactively notify their customers via email or SMS about a shipment’s progress. Customers can then select the delivery option that best suits their requirements via the On Demand Delivery website. The service is specifically tailored to the demands of international e-commerce deliveries, where the majority of shipments are addressed to residential addresses and customers place considerable emphasis on flexibility and convenience.

“We have seen the share of e-commerce deliveries grow from about 10% in 2013 to more than 20% of the international volumes of DHL Express in 2016,” said John Pearson, CEO Europe and Global Head of Commercial, DHL Express Europe. “This has primarily been driven by the strong demand for high-value and premium goods in the global marketplace, as well as the emergence of start-up retailers who are expanding opportunistically to new overseas markets and therefore require a worldwide door-to-door delivery service. In response to the dynamic growth and to ensure that our services continue to exceed customer expectations, we have launched On Demand Delivery.”

“On Demand Delivery isn’t just a new customer interface – it also represents an enhancement of our worldwide network, as we have tailored our last-mile operations to meet the specific demands of cross-border e-commerce deliveries,” said Charlie Dobbie, Executive Vice President, Network Operations, Aviation and IT, DHL Express. “Thanks to On Demand Delivery, we can support the service offering of online shippers and improve the delivery experience for their customers, while improving our own efficiency, particularly for last-mile deliveries.”

On Demand Delivery is easy to use and benefits both shippers and receivers. The site is accessed from any smartphone, tablet or PC, and offers receivers up to six delivery options. Shippers can incorporate their own branding into customer notifications. Receivers can schedule a delivery, arrange delivery to a nearby DHL Service Point or their own alternate address, and even request that a shipment is put on hold during a vacation. On Demand Delivery further improves first-time delivery performance, increases customer satisfaction, and makes the overall delivery process more efficient.

On Demand Delivery will be deployed to more than 100 countries through 2016 and 2017, accounting for the majority of global trade and online retail activity, and is available in over 45 languages.

DHL, the global logistics leader, has released the fourth edition of its Global Connectedness Index (GCI), a detailed analysis of the state of globalization around the world. The 2016 report shows that global connectedness, measured by cross-border flows of trade, capital, information and people, surpassed its 2007 pre-crisis peak during 2014. In 2015, globalization’s post-crisis expansion slowed, but the data indicates that it did not go into reverse. Currently available evidence – still preliminary in some areas – suggests that the world was about 8% more connected in 2015 than in 2005.

The Netherlands retains its top rank as the world’s most globally connected country, followed by Singapore and Ireland in third position.  All but two of the top 10 countries are in Europe, United Arab Emirates being the only other non-European country in the top 10.

Commenting on the results, Bernard McCarthy, Managing Director of DHL Express Ireland, said, “It is very positive that Ireland is ranked as the third most globally connected country in the world.  As a small open economy, our global connectedness is extremely important for Ireland. This is especially significant at a time when we are seeking to mitigate the impact of the UK’s Brexit decision and the more protectionist trade policies likely to be adopted by the incoming Trump administration in the USA.  Now more than ever it is in Ireland’s interest to diversify and embrace our wider global relations and trade and this report very much supports the fact that we are well positioned to do so.”

“Globalization has served as the world’s engine of progress over the past half century,” commented Deutsche Post DHL Group CEO Frank Appel. “The GCI documents that globalization has finally recovered from the financial crisis, but faces an uncertain future. It is imperative that policy makers and business leaders support an environment in which globalization can continue to flourish and improve the lives of citizens around the world.”

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At this stage, it’s difficult to predict the potential impact for Irish business but what we can state with some confidence is that the UK operating outside the EU would add complications and costs to the supply chain, and inhibit movement of goods across our borders.

The ESRI has estimated that the negative impact on trade between the UK and Ireland could be as high as 20%, which would have a significant impact on both economies – especially on the Irish economy.

Small and Medium Enterprises (SMEs) with a higher proportion of trade with the UK would feel a greater impact than larger companies, who tend to have a more diverse range of export markets, and are therefore less dependent on the UK as a destination.

The severity of the consequences of Brexit is also likely to differ by industry.  For example, the pharmaceutical and medical devices sectors, who historically have a significant Foreign Direct Investment (FDI) are not as reliant on the UK as they have a wide range of both EU and non-EU export markets.

In contrast, the Agriculture and Food & Drink sectors – are more dependent on the UK as a market, so the impact of a Brexit on these sectors would be much more significant.

According to a study by IBEC, the UK accounts for over half of all meat exports, valued at close to €2 billion and 30% of Irish dairy exports, valued at close to €1 billion. The UK is also an important market for ingredients and prepared consumer foods, accounting for 70% of exports in this sector.

A UK exit would mean Irish businesses would need to apply EU regulations but may also have to shoulder the cost of applying separate UK regulations. Customs and other procedures are also likely to become more onerous for exporters to the UK in comparison to current trade agreements.

Opportunities for Irish business if the UK leaves the EU

British exports to the EU could see a decline, which would provide a potential opportunity for Irish companies to offer similar substitute products.

A UK exit could see the value of the pound against the euro decline. This will have some implications for Irish exporters to the UK, potentially making their prices less competitive to UK consumers or retailers. A drop in the value of sterling, along with additional trade barriers, could put some Irish businesses at risk. In order to mitigate this risk, Irish businesses (in particular SMEs who have less product market diversity) should look to expand their market base to international markets.

Trading exclusively with the UK?

The EU would be the next logical step in terms of expansion.  Operating as a single market, the 28 countries that make up the EU represent a major world trading power. With just 7% of the world’s population, the EU accounts for 20% of global exports and imports. 18 of the 28 EU countries operate within the Eurozone, so there’s no exchange rate risk.

Also, don’t forget the EU operates as a single market, so for the vast majority of goods and services there are no Customs or regulatory restrictions. Irish exporters therefore have unfettered access to the 500 million consumers within the EU.

Irish businesses may have to learn to compete in different ways outside of the UK market and to make best use of all resources available to them in order to hold their own on the world stage. However, with good planning, a well-designed supply chain, a clear understanding of their competitive strengths, and the right mind-set, Irish companies can mitigate the potential risks associated with the UK leaving the EU.  Voting will take place on June 23June 2016.

For more information on DHL Express Ireland, visit www.dhl.ie/express