Deutsche Post Creating Global Logistics Giant

By Staff -- Logistics Management, 6/1/1999

It seems there is no bottom to Deutsche Post's extremely deep pockets. Germany's partially privatized postal service has been on a "shopping spree" for more than a year, and its aggressive schedule of acquiring logistics and transportation companies shows no signs of slowing.

A chronology of Deutsche Post's rapid-fire investments reveals what CEO Klaus Zumwinkel calls the "three pillars" of DP's expansion strategy: internationalization, expanding the product base, and expanding value-added logistics services. What follows is a summary of DP's recent acquisitions:

- Dec. 9, 1997: Acquires majority interest in Paketdienst G.P. Paketlogistik, Switzerland's second-largest package delivery service.

- March 25, 1998: Announces plan to acquire a 22-percent stake (later raised to 25 percent) in DHL International. DP will link its express-delivery service with DHL's global air-express network.

- Sept. 21, 1998: Purchases Global Mail of Sterling, Va., an international direct-mail company.

- Dec. 3, 1998: Acquires majority interest in Ducros Services Rapides of France, a parcel/express carrier serving France and Spain.

- Dec. 10, 1998: Announces intention to take over Danzas AG, a worldwide logistics company with annual revenues of $4.6 billion. Danzas will be the vehicle for DP's expansion into global logistics.

- Jan. 1, 1999: Acquires German retail banker Postbank. DP had handled Postbank transactions at post office counters; plans include developing new financial products.

- Jan. 7, 1999: Acquires majority stake in MIT, a domestic express and parcel company in Italy.

- Feb. 25, 1999: Receives approval from European Commission to buy 50-percent interest in express parcel carrier Securicor Omega Express, which serves the United Kingdom and Ireland.

- March 18, 1999: Announces plan to acquire European Transportation and Distribution (ETD) from the Netherlands' Royal Nedlloyd. ETD's parcel subsidiary will merge with DP; logistics and trucking operations will merge with Danzas.

- April 19, 1999: Announces plan to buy majority stake in ITG Internationale Spedition of Germany, a contract-logistics company specializing in the fashion industry.

- April 19, 1999: Says it will take over Qualipac AG, Switzerland's third-largest parcel company.

- April 26, 1999: Announces Danzas subsidiary will acquire ASG Group of Sweden, Scandinavia's leading provider of logistics and international transportation services. ASG's network will be integrated with that of ETD.

- May 3, 1999: Purchases YellowStone International Corp. of Chicago, the largest privately held international publications-distribution company in the United States.

The speed with which Deutsche Post is building a global logistics empire has taken many observers by surprise. In a press conference in April, Zumwinkel made it clear that DP intended to become the largest provider of mail, transportation, and logistics services in Europe and to provide global logistics solutions by the time it goes public next year.

DP's buying binge is not over yet, predicts Paul Jackson, chairman of the Triangle Group, a consulting firm specializing in the express/mail markets. "In Europe, they still have some holes to fill," he notes. "The $64,000 question ... is whether they'll acquire someone major in America. If they're going to be a global provider, then they have to get involved there."

Deutsche Post so far has enjoyed free rein in its shopping expeditions, but the European Commission now is investigating anti-competitive implications of DP's plan to buy German express carrier Trans-o-flex Schnell-Lieferdienst.

Will other postal services follow Deutsche Post's lead? "Absolutely," Jackson says. The Dutch post office was the first to buy a logistics-service provider when it acquired TNT in 1997, and the United Kingdom's postal service soon will take over Germany's fourth-largest express service. Jackson also believes that alliances between postal services and private-sector providers will become common. These alliances will develop by region or by product, he says. One example is the new arrangement between the U.S. Postal Service and DHL Airways, which allows USPS to offer two-day, trackable express service from the United States to Western Europe.