US embassy cable - 04ABUJA2043

UNCLAS SECTION 01 OF 02 ABUJA 002043 
 
SIPDIS 
 
E.0. 12958: N/A 
TAGS: ECPS, EAIR, ELTN, ECON, AMGT, NI 
SUBJECT: DHL EXECUTIVE BRIEFS AMBASSADOR ON NIGERIA 
OPERATIONS 
 
1.  Summary.  Nigeria is DHL's second largest market in all 
of Africa.  Despite DHL's difficulty and unpredictability in 
dealing with several government ministries and agencies, DHL 
makes money in Nigeria.  Lagos is DHL's West and Central 
Africa hub, although it bases its fleet of aircraft 
elsewhere.  NIPOST, Nigeria's government-owned postal 
agency, is a marginal competitor.  DHL would welcome a 
contract to deliver USG pouches to the Mission in Nigeria. 
End summary. 
 
2.  On December 10 the Managing Director of DHL 
International Nigeria, Richard Seaver, briefed Ambassador 
Campbell on DHL's Nigeria operations.  Seaver said DHL 
accounts for about 70 percent of Nigeria's in-bound cross- 
border express package delivery market; that is, of packages 
weighing less than 50 kilos.  Anything larger is considered 
freight.  DHL has 75 offices in Nigeria and employs about 
900 people, of whom only three are expatriates.  Only South 
Africa accounts for a larger operation. Egypt ranks third. 
Each day, a Boeing 757 flies from Brussels to Lagos to 
deliver packages.  DHL Nigeria ensures distribution in 
Central and West Africa via a fleet of 12 South African 
registered Boeing 727s that may fly daily to Lagos, but that 
return to Accra, Ghana or Libreville, Gabon where the 
aircraft are based.  Within Nigeria, DHL relies on 
commercial aircraft or a large fleet of its own trucks to 
ensure delivery.  Members of Nigeria's mobile police are 
assigned to each truck, at DHL expense, which permits 
overnight delivery to places like Port Harcourt.  In DHL's 
25 years of doing business in Nigeria, its trucks have been 
fired upon, but none of its employees has been injured. 
 
3.  Seaver, a veteran of nine years in Nigeria, described 
Nigeria as a challenge.  He said the company's difficulties 
stem in large part from the unpredictability that it 
encounters dealing with Nigeria's Customs Service or its 
Food and Drug Administration.  The difficulties are 
compounded by virtue of DHL Nigeria being regulated by 
NIPOST, which reports to the Minister of Communications. 
Concurrently, DHL Nigeria is responsible to the Ministry of 
Aviation, since DHL is an aviation company, although not an 
airline.  To be considered an airline, DHL aircraft would 
have to be registered in Nigeria, which would impose onerous 
obligations DHL prefers to avoid.  Lastly, DHL answers to 
the Ministry of Finance, the parent agency of Nigeria's 
Customs Service.  While all these Nigerian entities monitor 
DHL operations, their interagency coordination is weak. 
 
4.  Seaver said NIPOST no longer is involved in ex-Africa 
mail delivery, in part because NIPOST could not pay the 
connection charges associated with delivery of mail to 
America and Europe.  In Africa, NIPOST  may have 
arrangements with ECOWAS member states.   In Nigeria, NIPOST 
does run a small package delivery service, EMS.  It and 
another 120 companies control only about 20 percent of that 
market; DHL, USP, FEDEX, and TNT account for the remaining 
80 percent. 
 
5.  Seaver told the Ambassador that DHL Nigeria does 
business with the Embassy and Consulate, and said DHL would 
be pleased if it had the contract to deliver the diplomatic 
pouches to us.   The Ambassador replied that the Mission 
needs reliable and predictable delivery service, one 
ensuring delivery three times weekly despite the harmattan, 
labor strikes, or fuel shortages.  Seaver responded that DHL 
can assure such service.  Moreover, since the delivery of 
packages that weigh less than 50 kilos is DHL's core 
business, and since DHL ensures express delivery, whether a 
consignment is 10 kilos or 1,000 kilos on a given day, 
delivery occurs that same day.  Ambassador recommended that 
Seaver discuss the matter with the Embassy's Management 
Counselor at the earliest opportunity. 
 
6.  Seaver said Deutsche Post acquired DHL and Airborne 
Express in the United States this year.   Seaver believes 
that 40 percent of Deutsche Post's shares are traded on 
German stock exchanges; he expects more of the company to be 
privatized soon.  Since Deutsche Post also bought Danzas, 
one of Western Europe's largest freight handler, Deutsche 
Post is grappling with the complexity of ensuring proper 
meshing of its express package and freight handling 
operations in Western Europe and the United States. 
 
7.  Three of Seaver's associates accompanied him to the 
Embassy.  The two who gave us business cards were Morgan 
Uloko, the General Manager for the Northern Region, and 
Afolabi Olufade, the Divisional Manager for Abuja. 
 
8.  Comment.  British Airways, which has the contract to 
deliver pouches to the U.S. Mission, has been performing 
most unsatisfactorily.  Should it be possible to work with 
DHL, and if it were to be as good as its word, the effect on 
Mission morale might be notable. 
 
CAMPBELL