Igor Jakovljević (DPD): We Continue to Invest in Infrastructure, Digitalization, and the Development of Innovative Services

The volume of delivery services during the pandemic grew at a double-digit rate, both globally and in Croatia. Just as during the pandemic, now, in the midst of the war between Russia and Ukraine, logistical challenges have emerged for delivery companies, which must respond with speed and flexibility.

Igor Jakovljević, the CEO of DPD for Croatia and Slovenia, who gained his managerial experience first in various positions within DHL International and later as the CEO of Pan-Pek, explained the trends in the delivery market and announced new investments by DPD in infrastructure and logistics capacities in Croatia.

How have global events over the past two years reflected on DPD’s business results at both global and local levels?

– In an environment still heavily influenced by the global health crisis and contributing to a strong dynamic growth of e-commerce, our group GeoPost/DPDgroup, operating in 49 countries worldwide and 24 countries in Europe, achieved a total revenue of 14.7 billion euros last year, an increase of 14.8 percent, and successfully delivered over two billion packages worldwide. The group managed to break another record – the number of successfully delivered packages in one day. On Cyber Monday, 12.2 million packages were successfully delivered in Europe. As part of the group, DPD Croatia achieved nearly 20 percent higher package volume than in the record year of 2020. DPD Croatia’s revenues grew by about 25 percent, which is more than the volume compared to the previous year. A significant shift in the delivery of packages to end-users (B2C) is still noticeable in both the global and Croatian markets, and our group’s research estimates that there are currently 146 million regular e-shoppers in Europe. Within DPDgroup, the B2C volume in the courier, express, and parcel industry (CEP market) increased by 37.3 percent between 2019 and 2020, which translates to a revenue increase of 38 percent. In Croatia, DPD achieved a total growth of B2C packages of 35 percent in 2021 compared to 2020, with the share of B2C packages in the total volume amounting to nearly 70 percent.

The war in Ukraine represents a global challenge for logistics companies; how are you currently planning your goals and what scenarios are you considering?

– Throughout our network, employees have created individual and collective initiatives to help the citizens of Ukraine, and by supporting its employees, DPDgroup has shown its support for the Ukrainian population by donating one million euros to the Red Cross and the Red Crescent Movement through the French Red Cross. Additionally, DPDgroup is assisting in the emergency food aid initiative for residents of Ukraine and neighboring countries (Hungary, Moldova, Poland, Romania, and Slovakia) by donating two hundred thousand euros to the European Federation of Food Banks. Due to the situation in Ukraine, all package transport services to/from Ukraine, all package transport services to/from Russia and Belarus have been temporarily suspended, and only domestic transport services within Russia are maintained. There is an impact on volume and revenue related to this, but our strategy and goals remain clear. DPD has demonstrated resilience, flexibility, and agility expected from a company of our size over the past two years. These characteristics have helped us keep the world moving during the pandemic, quickly create and adopt new practices, and effectively handle increased volumes. This will also assist us in all the new challenges ahead.

What is DPD’s current development focus? Have you halted any announced projects until the global situation stabilizes?

– Our goals and strategy this year are related to acquiring new clients, developing new services, innovations, investing in digitalization that will facilitate delivery for senders and recipients of packages, expanding the network of Pickup locations for package collection, expanding the network of parcel lockers, and continuing investments in infrastructure. This year, we plan to expand our central sorting center in Zagreb, which will contribute to raising the quality of operational processes to an even higher level. Another major investment is related to the construction of a completely new depot in Dugopolje. The new modern warehouse-operational center will provide a completely new dimension of delivery quality in Dalmatia, strengthen ties with existing clients, and attract new ones, whom we can assist in expanding and developing their business. For now, we have not halted planned projects, but the overall situation is being closely monitored, both at the group level and at DPD Croatia.

What are the innovation trends in parcel delivery services and how do you monitor them?

– As e-commerce grows, there is an increasing focus on meeting the needs of end-users, so we are adapting as much as possible to their desires. Since November 2021, DPD has provided its service users with an additional communication channel: the Gita chatbot, controlled by artificial intelligence. The service is integrated into the DPD Croatia website and can be used on both computers and mobile devices. Additionally, in January 2022, we introduced a completely new, redesigned mobile application myDPD, which is based on chatbot communication. The Gita chatbot responds extremely quickly to user inquiries and is available 24/7. It can manage thousands of users simultaneously through automated repetitive tasks. Since the launch of the chatbot, we have an average of over 80 conversations per day, with a success rate of over 93 percent in providing requested specific information, so we can say that Gita is a full-fledged member of our Customer Service.

Regarding the myDPD mobile application, the live-tracking feature allows real-time tracking of the package’s journey, meaning the package recipient can see exactly where the package is located. If the recipient is not at home at the time of delivery, they can easily change the delivery date or address or redirect the package to one of our Pickup locations for package collection or to one of the DPD parcel lockers. The development of an alternative network for package collection is one of DPDgroup’s priorities across Europe, so the goal this year is to optimize the network and enrich it with new attractive Pickup locations and a network of parcel lockers. Additionally, we have provided all our clients with the myDPD Business portal for tracking and managing packages, which will facilitate their overview of all their business-critical data and speed up the delivery process.

The entire industry faces a demanding and ambitious goal: reducing harmful environmental impacts. How realistic are these goals and in what direction is DPD investing in this segment?

– In 2020, DPDgroup announced its green strategy, committing to deliver packages exclusively with zero or very low harmful emissions vehicles in over 225 of the largest European cities across 20 countries, to introduce seven thousand alternative delivery vehicles into its operations, and to open 80 new urban depots across Europe. Given the rapid implementation of the strategy, the goal for 2022 has been increased to 350 European cities by 2025, where packages will be delivered exclusively with zero or very low harmful emissions vehicles, and to have over 15 thousand alternative vehicles, 6700 chargers, and 250 urban depots. This will drastically reduce DPDgroup’s environmental impact and the so-called last-mile carbon footprint in targeted cities, reducing annual greenhouse gas emissions by 83 percent and pollutants by 95 percent compared to 2020.

In November 2020, we opened the first urban depot in the center of Zagreb from which all packages are delivered exclusively by bicycles, and citizens gravitating towards the center can pick up their packages at the City depot or send packages throughout Croatia and worldwide. To further reduce harmful environmental impacts, the plan is to introduce more than 20 low-emission vehicles in Croatia by the end of 2022, and over 200 by 2025. Additionally, this year we plan to start a program for monitoring air quality in Zagreb.

Are you able to meet demand with your own capacities?

– In recent years, we have invested heavily in the development of DPD’s infrastructure and network in Croatia. Recently, we have strengthened our logistics network by opening completely new depots in Križevci, Petrinja, and Šibenik, relocating to a completely new location in Varaždin with a new modern depot, and increasing logistics/warehouse capacities in Osijek, Pula, Ploče, and Pojatno. This year, we plan to relocate to a new, better, and larger location in Rijeka, build a completely new depot in Split, and expand our central sorting center in Zagreb. We continuously invest in automation and new technologies that enable faster processes and less manual labor in all 17 DPD depots across Croatia, and with record volumes, we are able to meet market demand with our own capacities.

Content created in collaboration with DPD.