DHL Express has set another inflation-busting price hike for its UAE customers.
The company, which is the letter and parcel delivery arm of Deutsche Post DHL, said yesterday that the average price increase for customers from January 1 would be 4.9 per cent.
“DHL Express adjusts its prices annually, taking into account inflation and other rising costs,” a statement from the company said.
A DHL spokesman said that no company executive was available to make further comment.
DHL has increased prices in each of the past four years by exactly the same amount, and by “up to 5 per cent” in 2011 for a cumulative increase of about 24.5 per cent.
Over the same period, inflation has been running at an average 1.3 per cent annually, while the price of jet fuel, which accounts for a large proportion of international parcel shippers’ costs, has been essentially flat. Indeed, the price of aviation jet fuel for the Middle East and Africa is down more than 10 per cent over last year, according to the International Air Transport Association.
In a statement accompanying the price increase, the DHL Express chief executive Ken Allen said the annual price increases were “one of a number of factors that allows us to ensure service excellence”.
He went on to cite investments the company has made in its worldwide infrastructure.
The international delivery market is highly concentrated, with UPS, FedEx and DHL dominant.
Transport Intelligence, a research firm, estimates that DHL has a market share of about 40 per cent in Asia and more than 50 per cent in central Europe, the Middle East and Africa.
Last year, the European Commission blocked a proposed acquisition by UPS of TNT on grounds that “the acquisition would have reduced the number of significant players to only three or two, leaving sometimes DHL as the only alternative to UPS. The concentration would therefore have likely harmed customers by causing price increases”.
DHL has been expanding in the UAE. Last month, it announced the addition of four new retail points, bringing to 28 the total number of outlets in the country. It also recently opened its Dh100 million logistics facility at the Meydan racecourse complex, which the company reckons is the largest of its kind in the Middle East and North Africa.
The DHL Express division reported US$7.6 billion revenues in the first half, with operating profits of $780m.
amcauley@thenational.ae
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