Deutsche Post AG plans for Europe

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BONN, Germany - The Deutsche Post AG plans to become Europe's largest courier, express and parcel service within five years, and take the lion's share of a market estimated at 44 billion German marks ($27 billion) a year.


Dr. Klaus Zumwinkel, CEO of the semi-privatized German Post, made that claim last month after the European Commission approved German acquisition of a 22.5 percent stake in the California-based US carrier DHL.


Zumwinkel plans to achieve this goal through a series of joint ventures with foreign transportation enterprises and the creation of wholly-owned start up operations, an undertaking he began late last year.


The Germans have taken a 60 percent stake in Servisco, Poland's largest private package delivery service. Its International Parcel Post (IPP) subsidiary has built up a "Quickstep" parcel delivery network together with a number of mid-size Austrian transportation firms.


IPP has also acquired the Swiss package delivery firm, G.P. Paketlogistik, a company with an annual turnover of DM 50 million ($30 million) and 170 employees. The Swiss firm specializes in delivery of BTB packages.


In Belgium, the Germans bought control of the Belgian Parcel Distribution (BDP) Service. And this spring IPP began building its own logistics and transportation network in the Czech Republic slated to begin package delivery this fall.


Zumwinkel noted that the "globalization of markets poses totally new challenges" that can only be met by creating a first class quality service structure "in a pen-European freight transport network."


Nor are German ambitions limited to Europe. Deutsche Post AG is developing as yet unpublished plans to enter the American market in competition with Royal Mail and the Dutch TPG enterprise, as well as with USPS.


Acquisition of the Dublin-based Fortress Europe, a full-service DM company, is nearing completion. The alliance will allow the Germans to offer US catalogers "one stop" shopping facilities for entering the German and other European markets.


Add DHL service and the Germans will be able to offer customers a worldwide network with links into 227 countries.


Behind this flurry of activity over the last six months lies a drive to prepare Deutsche Post AG for the march to global stock exchanges. The company has set the year 2000 as the target for going public.


It hopes to emulate Deutsche Telekom, its PTT partner, which went public in 1997 and has achieved solid gains ever since, despite the opening of the German telephony market to private competition on January 1 of this year.
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