Peter Bardens, vice-president of UK hubs for DHL Express

Logistics industry is taking off in the East Midlands

DHL has been at the forefront of the logistics boom created in and around East Midlands Airport, with its cargo operation having been at the site for almost four decades. With the region now one of the multinational firm’s most important strategic sites in Europe, Dan Robinson sits down with Peter Bardens, vice-president of UK hubs for DHL Express, to learn about its growth and what the future holds for both the company and the logistics industry.

SUSTAINABILITY

Sustainability will be at the heart of DHL’s future vision, featuring plans for electric planes and vehicles.

In March, parent company Deutsche Post DHL Group announced an “accelerated roadmap to decarbonisation”, pledging to invest 7bn euros in a goal to achieve climate-neutral logistics by 2030.

Funds will be pumped into alternative aviation fuels, the expansion of electric vehicles and climate-neutral buildings.

A third of its fuels are now sourced sustainably but it wants to increase this significantly.

Peter says: “We’re always looking at the latest innovations around green technology for our industry, which includes things such as electric planes.

“We’re working with manufacturers of our HGVs to look at the options available to reduce emissions, and we’re exploring how to use hydrogen-fuelled vehicles at Heathrow. We want to be a good corporate citizen and sustainability is central to this.”

The year of 1973 was a big one for East

Midlands Airport (EMA). Then only eight years old, the opening of a second terminal allowed it to expand its nascent freight operations. Six years later, Royal Mail became the site’s first major courier, but it was the arrival of DHL in 1984 that was a real gamechanger.

Even though only one or two aircraft took off each night, it set in motion a growth journey that resulted in the delivery giant’s UK hub, based in the East Midlands, becoming one of the largest in Europe with almost 30 cargo flights now transporting goods across the continent and beyond every night.

“If you look at the UK geography, there’s no better location than the East Midlands,” says Peter Bardens, who oversees the cargo hubs at East Midlands, Heathrow and Luton airports for DHL Express, the arm of the business overseeing the courier vans and flights that most people will be familiar with.

“It’s very central in the country and supported by the motorway infrastructure, with the arterial link to the north and south via the M1, as well as the A50 and M42. By road, you can touch pretty much all of England within four hours, so we have direct linehaul vehicles coming into the East Midlands from all corners of the country.

“The only parts of the UK we don’t use the road to feed into the region is Scotland, where we fly from Edinburgh and Aberdeen, and Northern Ireland.

“That why it’s always been our main hub for the UK since the 1980s and the rapid growth we’ve seen since then has allowed us to grow our facilities.”

THE SAN FRANCISCO-founded, Bonn-headquartered company is one of two major couriers to have its UK hub in the region, alongside UPS, with TNT another big player on the site.

Its postyellow planes, adorned by DHL’s now iconic red lettering featuring “speed stripes”, jet off from the East Midlands to various European sites including Brussels, Spain, Italy and the Nordics, as well as the North American hub of Cincinnati and its New York, Miami, Los Angeles, Chicago spokes. Flights to the group’s global hub in Leipzig also serve markets such as Asia-Pacific.

Although the freight operation’s expansion has been a steady one in tandem with e-commerce growth, there’s no doubt the pandemic has been an accelerant, increasing the volume of flights from about 23 to around the 28 or 29 mark as lockdown forced even more consumers and businesses online.

The result was EMA, the UK’s largest pure cargo airport, hit new records – experiencing its busiest ever period in the run-up to Christmas. Some 41,613 tonnes of goods were processed across the airport’s five cargo terminals in November 2020, a 26.4% increase on the previous year.

DHL has been a major contributor to this growth, having diverted much of the volume that would have been destined for bellyhold on passenger flights at Heathrow to the pure cargo operation in Castle Donington. Peter, who points out the company invested heavily in making its sites Covid-safe for staff at the outset, says: “Bellyhold is historically a big part of our network because it helps us to manage capacity and gives us enhanced transit to more niche markets, but there’s been a massive reduction in passenger aircraft flying around the globe.

“With that evaporating, it meant we had to find a solution for all our shipments that were due to go all over the world.

“This has resulted in more volume going through our main hubs like the East Midlands, Leipzig, Cincinnati and Brussels. We’ve had to increase our cargo capacity to sustain the growth we’ve seen from Covid while managing the downward bellyhold capacity.”

There’s also been new trends taking hold during the pandemic, as Peter adds: “The UK high street is changing forever, but businesses are adapting how they interact with each other and we’re seeing an evolution of B2B e-commerce. Maybe Covid has accelerated a lot of that but these trends already existed.”

A MAJOR EXPANSION at the Cargo West hub completed three years ago enabled DHL Express to build new office space to accommodate its customer service team next to the huge warehouse that leads straight on to the runway. Its total footprint now exceeds more than a million sq ft, employing 3,000 people across the daytime and evening operations.

The biggest change, though, has been the technology used. Peter explains: “We’ve gone

PETER’S CAREER AND OPPORTUNITIES TO MOVE ROLES

Entering the DHL workforce at junior levels can be the start of a journey to the summit of the multinational firm, believes Peter.

He recalls how a colleague doing the same job he was on his first day at the company 27 years ago went on to become an HR leader of its Americas business, a trajectory that isn’t uncommon.

“There’s numerous examples we can point to of people developing their careers from the bottom to the top of the company,” he says.

“John Pearson, the CEO of DHL Worldwide Express, started in an entry-level role as a sales rep in the Middle East, while there’s senior leaders in HR, technology, sales and marketing who have had similar journeys.

“We have a tight network of people and we’re an organisation that is built on that culture of inward growth, development and upwards mobility.”

Peter joined the company after finishing college. He had been due to go to university but a six-month placement at DHL as part of his college course turned into a permanent stay.

Starting life in customs clearance for imports and exports, he progressed to supervisory positions and then network planning management roles.

As the company expanded aggressively after the turn of the millennium, it provided new opportunities to reach senior positions and Peter eventually moved to a global commercial role in the former European hub at Brussels, where he oversaw procurement for bellyhold space.

Stints in Los Angeles and Cincinnati followed, running all the export and import gateways in the US, before he returned to the UK in 2014 to run the expanding East Midlands hub as director of operations.

Now VP of UK hubs, a role he has occupied for two years, Peter is responsible for the interface between DHL Express’ ground operations and its wider network.

He says: “The motivation for coming back from the US was because I could see the growth and the transition to adopting new technology, so I wanted to be part of it.”

ADAPTING TO THE BREXIT TRANSITION

The nature of trade with Europe has “changed forever” believes Peter – but he believes DHL avoided the worst Brexit disruption by preparing early.

After spending four years preparing by training people and investing in infrastructure, he believes DHL Express has adapted to the transition relatively smoothly.

While admitting the lastminute nature of the EU trade deal didn’t help, Peter says: “That work has borne fruit for us – we recruited more than 200 people at EMA to work on Brexit preparations – because we’ve had very few issues with the movement of goods.

“One of the biggest parts of it was about educating shippers but we did a huge amount of work with our customers around the paperwork.

“But the interaction with Europe is going to change forever and we have to keep a close eye on the future set-up with Northern Ireland so everyone understands the requirements when shipping to there.”

Peter is keen to push the ‘plethora’ of jobs available in the industry

from what was a very manual process, in which people placed packages on belts and would touch items six or seven times as it goes through a facility, to a nextgeneration automated sorter that removes a lot of this.

“Now we handle a shipment two or three times as it goes through a facility. It’s allowed us to grow into the future.”

More expansion is on the way. On the neighbouring SEGRO Logistics Park East Midlands Gateway, there is a separate warehouse for the DHL Supply Chain arm, which comprises the company’s third-party logistics services. It received planning permission last year for a second 670,000 sq ft building that will take its headcount on the park to 1,100 people by 2025.

The DHL Express development, meanwhile, was designed with an expected lifespan that would take it to 2036 but there’s every chance this could be brought forward.

After recently reporting its strongest quarter in its 50-year history, DHL Express has also announced it will remodel its East Midlands-based airline, DHL Air UK. An expanded fleet of new B777F aircraft and more B767s will enable it to increase flights between the UK, the Americas region and Asia from next year.

“We’ve seen rapid growth since the expansion was built but as that’s really skyrocketed over the past 15 months, we’re now in the process of evaluating our network around the UK and how to accelerate ourselves into the future.

“But what’s clear is the East Midlands will always be the cornerstone of our UK network, connecting to the rest of the world.

“We’re touching 220 countries from the East Midlands every 24 hours. We have seen great growth but that will only continue if we’re able to offer a great service to our customers. The future of logistics is going to evolve, the demands of consumers are going to evolve and companies like DHL need to be at the leading edge so we can continue to support plc and UK economic growth.” streamlined customs, closely to see whether it could offer support in the future.

But even before it was announced in the spring budget, the company had identified the region’s potential to be a logistics powerhouse.

Peter says: “If you look at the way passenger and cargo airlines operate, the UK is used as a major transit point from the MENA region to the Americas.

“That’s where the East Midlands is really important to us as a critical location for feeding volume across the Atlantic.”

Like many in the industry, he’s keen to push the plethora of jobs available. DHL – a Global Top Employer for seven years running with the Top Employers Institute and second on the World's Best Workplaces list – offers roles in aircraft handling, customer service, couriering, IT, HR and training to name just a few options.

But he adds: “There’s no two ways about it – with the evolution of the logistics industry, it becomes more challenging to find people with the right skills.

“At the same time, we’re seen as a good employer that offers stable jobs, which helps us to find very good talent.”

In the past, the logistics industry picked up people who had lost their jobs as traditional industries like steel and mining disappeared.

With the economy again in flux, there could be similar scenarios as more sectors undergo transition –although Peter recognises perceptions need to change.

He adds: “Some people still think logistics is about passing boxes around and delivering packages. Although those types of jobs exist, we have to create visibility of the other roles we have to demystify the sector.

“The skillsets and types of people we’re looking for have evolved and will continue to do so as 80% of the jobs that will be in the market in 2030 don’t even exist today.

“They will be more technical because today’s skills are a lot different to what they were 10 to 20 years ago.

“We’re more than aware of this and need to make sure we’re looking to the future skillsets that will drive our business – and ultimately the East Midlands – forward.”

INVEST IN PUBLIC TRANSPORT

Better public transport is needed to connect workers based in towns and cities with the jobs being created at logistics parks around East Midlands Airport, believes Peter.

“We’re pretty much in the centre of Derbyshire, Leicestershire and Nottinghamshire, but the public transport infrastructure isn’t as good as it could be,” he says.

“The assumption is people have their own cars but there’s a lot who don’t, and they need to be able to have easy access to their workplaces, especially for night-time workers –and we have 1,200 people working overnight shifts.”

EMA has been compared to a “mini city”, with about 5,000 people working there at peak times, but it still lacks appropriate connectivity.

He points to Germany – where DHL Express’ global hub is located, in Leipzig – as a good example, adding: “Their public transport options outside cities are incredible compared to the UK.

“Our country has invested well in transport in cities with systems like trams, but there’s still a lot of work to be done for out-of-town industries.”