DHL’s CEO on tariffs, economic protectionism and Germany’s economy

There are fundamental challenges facing global supply chains today: the rise of protectionism and tariffs, economic competition with China. Kind of like a crystal ball, we can look to the shipping industry to understand how these are unfolding.

German company DHL Group is one of the largest logistics, shipping and transportation businesses in the world. The company’s CEO, Tobias Meyer, recently spoke in an exclusive interview with the BBC’s Leanna Byrne. The following is an edited transcript of their conversation.

Leanna Byrne: Tariffs and trade barriers, they’re really affecting the flow of goods everywhere in the world. Are you seeing any shifts in trade routes or even demand patterns?

Tobias Meyer: It is not, as many people say that see a strong de-globalization, but the pattern is changing. China’s trade with the rest of the world is still growing heavily. Some people in the West don’t fully notice, but it is happening.

Byrne: So you’re not necessarily seeing policies of protectionism hurting global trade and logistics as much as perhaps we might talk about in the news.

Meyer: Well, we do see that it has an impact, and that it makes some supply chains also more costly. Trade barriers drive inflation.

Byrne: I’m sure when Brexit happened, that was just a huge headache for DHL. The U.K.’s Prime Minister is meeting with Olaf Scholz, because he wants to reset Britain’s relationship with Europe. I mean, do you have any thoughts on how a trade relationship between them might work or what you would like to see?

Meyer: Well, first of all, what happened during Brexit is very unfortunate for the British people. And I think many by now have recognized that, that foods get more expensive, processes get more cumbersome. We employ an additional hundreds of people in the U.K. and in Europe to do paperwork, to just do paperwork. We’re all not happy with some things happening in Brussels and these guys inventing new bureaucracy, but Brexit did a multifold of that in terms of constraining trade. And, you know, we’ve seen the exports from the U.K., particularly from SMEs, plummeting after Brexit, because they couldn’t put up with all those additional requirements and the cost. So getting back onto a track to simplify trade relationships, I think, is in the interest of both Germany and the European Union, as well as the U.K.

Byrne: I want to ask you about the German economy, because obviously you’re one of the largest businesses in Germany, as well. Germany’s really facing a drop in industrial investment. How does that play out in DHL’s business? What do you notice?

Meyer: So we do see that, unfortunately, that German exports have been relatively weak in terms of volume, especially also into the European neighbors. On the consumer side, we are mainly seeing this through our parcel delivery business, but also the mail side has some elements where you get an indication — advertisement mail, for instance — how bullish people are. There it is on and off.

Byrne: I mean, the German government has been criticized for not being really agile enough and responding to economic challenges, particularly in the industrial sector. Would you agree with that assessment?

Meyer: Yes and no. First of all, I think we need to be careful in blaming politicians too much. You know, these are folks that we elected as the people, and in Germany, we choose to elect a very fragmented parliament. And we don’t have a majority vote, as you have it in the U.K. or in the U.S. We vote for parties, and the more parties that are represented in the Bundestag, the federal parliament, the more difficult is to form a government. Now, could certain things have been decided quicker and better? Definitely so. But I think the context and difficulty, structural difficulty to govern across such a broad coalition is the root cause of why we are having a lot of discussions in this country.