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Amadou Diallo, CEO DHL Freight: „DHL is the only logistics company worldwide, which operates in all 54 African countries including Southern Sudan. We have been in Africa for 36 years now.“

Interview with Mr. Amadou Diallo, CEO DHL Freight, on 10 October 2014

Mr. Diallo, many thanks for your willingness to conduct an Interview with SenGermany. You are a compatriot having pursued a career at DHL for nearly 20 years now. When did your employment take place?

Diallo: I started at DHL,at the time at Deutsche Post, in 1996.

I remember that you worked in company Controlling back then.

Diallo: Yes in 1996, I was in charge of international Controlling for Germany, Austria and Switzerland.

When was DHL taken over by Deutsche Post?

Diallo: Prior to the takeover of DHL, I was already employed with Deutsche Post. I formely worked at Nedlloyd, a Dutch company. This company was, jointly with Danzas and numerous other enterprises, taken over by Deutsche Post, since Deutsche Post pursued the strategy to not only stay in the letter business, but to also enter the logistics market. The vision in the years 1996 through 1997 was that, due to changing tendencies in the global economy to be expected in 15 years ahead, people will no longer write so many letters. Digitalization was on the way. Hence, I was employed with Deutsche Post in order to set up an Express division in Bonn. In those days, Deutsche Post had the nickname "snail mail". We were then a few people being employed with the Federal Ministry for Post and Telecommunication, so as to promote the set-up of the international logistics division. Hence, I was asked to function as Head of Controlling in the Express department.

How did it work?

Diallo: Very well! In those days they knew only people from Senegal, who had accomplished an internship at Deutsche Post. Then they met young managers, who were already active in the international business, and I learned how to cooperate with officials.

When was DHL taken over?

Diallo: The takeover took place in 2002. Meanwhile I had spent some time in France as an Investment Controller at DHL, when the Post still held 10% of the shares. In France I functioned as CEO for Ducros, a logistics company we had purchased there. I thus spent four years in Marseille. During this period DHL was completely taken over by Deutsche Post. I stayed until 2003 and was responsible for the integration of DHL France, Danzas and 13 enterprises we had purchased there. Then I was asked to return to Germany, since we wanted to set up a logistics division in addition to the Express and Letter divisions. I was then appointed Global CFO for the purpose of setting up the Logistics division. Subsequent to the set-up of the Logistics division, it was two years later when we purchased the British company Exel, where 110.000 staff members were employed.

What kind of business was done by Exel?

Diallo: Exel was only involved in logistics. It was a globally leading company in that field. In order to integrate Exel at Deutsche Post, I was asked to go to England together with a colleague from China.

Where did you go after your stay in England?

Diallo: After the integration of Exel, I directly went to Singapore. In those days it was clear that Asia was in the process of further development. And I also had a desire to work for a short time outside of Europe. Moreover Asia was the new exciting Market. From Singapore, I helped to set up our business operations in Vietnam, Sri Lanka, Bangladesh, Pakistan, thus in the whole of South East Asia, since China was a well-known country, not however the other countries I mentioned above. I acted as CEO for South East Asia and the Pacific. In India alone, we are present in 500 cities with around 17.000 employees working at DHL. Then, in 2010, I got the African continent. Hence, we established branch offices in 25 African countries from Asia.

Why from Asia?

Diallo: I was born in Africa and I lived there. And from my point of view countries like Vietnam or India were not substantially different from what I experienced in Tanzania, Kenya, Côte d’Ivoire or Senegal. The resources and know-how needed in Asia for getting big in Asia, were actually quite similar to the demand in Africa. All Managing Directors employed by me in Africa in those days, were trained in Asia, since it was easier for them compared to Europe.

Now we are right in the middle of the African business. How many branch offices of DHL are located in Africa?

Diallo: DHL is the only logistics company worldwide, which operates in all 54 African countries including Southern Sudan. We have been present in Africa for 36 years now. We now have a footprint in Africa, like no other logistics enterprise. Even big French companies like SDV operate primarily in Francophone countries, and not like us in Mozambique, Ruanda or Angola. Furthermore we employ 10.000 staff members in Africa, of whom no more than one percent comes from non-African countries. All of them are Africans, who were born in Africa and have been trained by us. Of those 10.000 employees, we trained 4.000 as forwarding merchants. In the Express division we call them Certified International Specialists. And we have Managers from the second and the third row, who worked for internationally active companies. We trained them and now they are the people who conduct our business transactions in Africa. I am very proud of that.

When we met in the German Bundestag a few days ago, you told me that goods are transported overland between Europe and Senegal. Which routes are concerned?

Diallo: 15 years ago, the Asia Development Bank implemented an infrastructure project with the aim to establish links between the Asian countries. Likewise, the Africa Development Bank has a similar project. If it is nowadays difficult to drive from Morocco to Algeria, this is exclusively due to political reasons. This also applies to routes between Libya and Egypt. But now already, there are streets which are drivable on the route between Gibraltar and Dakar. These are normal highways with service areas and hotels, like those known in Germany. This route has nothing to do with the former Rally Paris-Dakar, which people know from television. There are numerous radar controls and policemen supervising the whole thing. You will also meet German students on campgrounds.

Has this route been used by DHL only for the intra-African business, or also for goods transported between West Africa and Europe, and vice versa?

Diallo: Take, for example, the German-Russian business. The customer can choose whether his goods shall be transported by air, by ship via Finland, or by land via Poland. The customer chooses the most favourable solution for delivery of his goods. The same applies to transportation between Europe and Africa. Our experience shows that overland supplies are increasingly favoured. There are various reasons for this: Customs officers are not as complicated as in the ports or at airports. The security systems are less complicated, there are fewer restrictions and the procedure is a lot faster, as it does not happen every day that a cargo machine flies to Dakar, and the street is always open. If only one truck is needed, it is not absolutely necessary to move a Boeing or a big vessel of the Maersk shipping company. The goods from France, Spain and Portugal, with Senegal as country of destination, are increasingly transported by land. And from Senegal it is possible to reach Mali, Guinea and the other West African countries. The same applies to the route from the Mombasa port in Kenya via Uganda and Tanzania up to Ruanda.

The city Dakar could thus function as place of transshipment for the neighboring countries?

Diallo: This is true, now already. We fly three times a week a Boeing 747 from Brussels to Dakar. For DHL, Dakar is a hub already. By sea, Dakar likewise serves as a hub. And the same holds true of street transport, because if the goods having either been flown or shipped are already available in Dakar, it will be reasonable to first bring everything coming overland to Dakar, so as to be able to consolidate these items and thereafter drive them into the neighboring countries.

Which goods are mainly driven to Dakar?

Diallo: There is a multitude of goods. In Mali, for example, more and more people open a bank account, due to their greater purchasing power. The fact that these people now increasingly work with banks, leads to a situation where more cash machines are needed. These cash machines are manufactured on an industrial scale in Eastern Europe, America or in Asia and conveyed to Dakar, as an increasing number of cash machines is needed there as well. The rest is then driven from Dakar to Mali. The same is true of mining. Meanwhile, there are many mining companies in Mali. The tools they need for exploration are increasingly transported via Dakar. The same applies to consumer goods. In West Africa people buy a lot of textiles and shoes, which are produced in Italy. This is also part of our business. We carry an enormous amount of products from Asia to West Africa via Dakar.

What is the movement of goods from West Africa to Europe like? Is this merchandise traffic still in its infancy, or has a development become noticeable?

Diallo: There is certainly some kind of development. I don't know what you regard as children's shoes. In my opinion the shoes get bigger and bigger. They can still not be called shoes for adults, but they are at least shoes for adolescents. A lot of pharmaceutical companies from Morocco have been established in Senegal and produce herbicides there, as Senegal is a low-wage country for them. The products are collected there and then brought to Spain. A lot of fruit are processed in Senegal. Senegal is exporting a lot of fish, but increasingly also tuna cans. More and more textiles are produced by French companies in Senegal and Mali. Meanwhile a lot of fashion designers are active there. The mining companies ship a lot of samples to European laboratories. Here, they check the values, before they start to produce in series in Mali or Senegal.

At the 1st German-Senegalese Economic Summit, one year ago, FRAPORT was invited as speaker. You were awarded the contract to operate the new international Airport of Senegal in the city Ndiass. Since DHL cooperates with Fraport in Germany, can you imagine that firm plans have now already been set up between Fraport and DHL in Senegal?

Diallo: In Senegal the company name reads Daport. Ever since the decision was made to construct the new Airport, we planned to be granted options for storage areas close to the Airport, as in our opinion a new Airport makes it possible to better work as a logistics hub. We will therefore transfer our hub from Dakar to Ndiass, in order to cooperate with Daport. The same also applies to the Global Forwarding business operated by us. For this purpose two large warehouses have been planned as an option. There, we will be able to store and condition goods coming from Africa, in order to have them exported under the same conditions as goods coming from Europe. Likewise, we will transport goods from Europe to Ndiass and store them there, until customers requesting these products say they want them within the next three days. We speak of a temperature-controlled storage, depending on the nature of the goods concerned.

To what extent have investments already been made and planned for these warehouses?

Diallo: In Senegal we constructed more warehouses than we initially planned. When I travelled to Senegal for the first time, we had around 100 employees there. Now we have 500 employees. And we will provide even more warehouses, since for instance the German Federal Armed Forces selected Senegal as NT Point for their activities in West Africa. The Americans do the same. Hence, a lot of activities take place there. Many infrastructure projects are planned there. Many investors can be found in the energy sector and in mining. We therefore encounter a lot of activities taking place in Senegal and in all other African countries, so that it is difficult to find enough people who can implement these business opportunities.

Does this mean that there is a lack of staff?

Diallo: Qualified staff is lacking.

But you just said that DHL trained 4.000 staff members in Africa. So there should really be no problem in training such people in Senegal.

Diallo: We do not have that problem in Senegal only. The growth rate in Senegal is only 4.5%. In countries with a desolate health system like Sierra Leone and Liberia, the growth rates are now already forecasted to reach 12 up to 14%. In Ethiopia, where 85 million people are living, the growth rate has attained 10% in the last 8 years. We have the same issue in Mozambique, Angola and Congo. As you see, numerous branches of industry are under development. Indeed, more than 35 Millions square kilometers must be operated in Africa. It would be a complex matter to train talents everywhere in Africa. We are of course no university or training institute. We work with our resources. But growth is much faster than one might think.

Now back to Senegal. How many employees shall be trained by DHL, so as to properly run your business?

Diallo: About four months ago, we set up a branch office in the city Touba in the center of Senegal. A lot of people are living there, who learned to speak Arabic, but can neither speak French nor English. We must therefore have employees in our organization, who can handle our entire business techniques with the people in Arabic or Wolof. And in the Backoffice we must have people, who can translate these agreements into English, so as to enable us to transact our business in the same way as in all other countries. There is no other logistics company, and not even a national logistics enterprise operating a permanent establishment in Touba. And the city is after all the second largest economic center, coming immediately after the capital Dakar in Senegal. You can thus imagine that things are more complicated than training a forwarding agent in Düsseldorf. But we nonetheless try to make things possible. We do the same in the Southwest of Senegal in the city Ziguinchor, since many activities are ongoing there. We are likewise active in Guinea-Bissau, as many products are exported from this country via Senegal to India. To do so, we must accompany the Indians there, and deploy the talents we have in Senegal in Guinea-Bissau, as we do not find any trained people in Guinea-Bissau. At DHL in Africa, we employ a large number of Senegalese in Ghana, Côte d’Ivoire, Guinea-Bissau and the Cape Verde Islands, since they show a good training basis.

You mentioned the city Ziguinchor in Senegal. I assume that DHL is transporting fruit and vegetables from there.

Diallo: In that place, especially streets are currently constructed in large numbers. For this purpose a lot of machines and materials must get there. But if you drive in the direction of Guinea-Bissau, you will actually see that this country is globally the biggest producer of cashew nuts, holding a share of 55%. But there is no good port in Guinea-Bissau, which is the reason why these cashew nuts are delivered from Guinea-Bissau to Dakar, and are exported from there to India, where the processing takes place. A local processing is only existent in Congo. The goods produced in Senegal and Guinea-Bissau are brought to India, packed in small bags, and these are the snacks you receive in the airplanes. Most of them come from Guinea-Bissau.

This means that the market option for Senegalese is to do Food Processing with cashew nuts.

Diallo: Yes, precisely.

We now come to our Economic Summit of 7 November. Will you attend the event?

Diallo: Yes, I will be there.

Wonderful. I am delighted to see you there. I can imagine that you will participate in the podium discussion in the morning and in the Food Processing Workshop. The participants of that Workshop will be members of the African Association of Inshore Fishing from Senegal and Côte d’Ivoire. They are interested in learning how to efficiently process and pack fish as fillets and, let us say, sell these products by DHL to Europe. Which are the solutions you can offer to these people?

Diallo: Not so long ago, we installed a platform in Germany named www.allyouneed.com, where you can for example order foodstuffs and have them delivered to your house. This functions like a Retail Platform, which is rather an E-Commerce Platform, that you might be able to use. Secondly we work with the World Trade Organization (WTO) in Geneva, and ITC. We have common projects in Ruanda, Benin und Ethiopia, where people are taught how to store and process quickly perishable foodstuffs in optimal conditions, so as to comply with the European standards. We also handle a lot of fish exports from Norway. There are also many fish and meat exports from Australia to Japan, a country imposing very strict requirements. We have thus gained a great deal of experience in most different regions of the world, which we could use in Africa. But we must teach our farmers that they do not have to export their production always to Rungis (the market halls in Paris). They should for instance also try to export their goods to Japan, Australia or countries, where they can make more money, instead of choosing just a "one-way road".

I hope that what you just told me will not fall on deaf ears, when people hear such things at the Economic Summit. The representatives of the African Association of Inshore Fishing intend to present their insights from Germany on the occasion of the World Days of Fisheries on 21 November.

Diallo: I hope that they will meet many Japanese, who will show them how to prepare Sushi and to have it exported to Europe. Thus they can earn much more money, than if they sell a whole fish.

Mr. Diallo, thank you very much for the Interview.

This Interview was held by Ibrahim Guèye