Deutsche Post looks to US for growth

Deutsche Post is considering a push into the US market to boost growth at Europe’s largest postal group.

The company’s strengths have hitherto lain in Europe and in the increasingly competitive Asian airfreight market, through its DHL operation.

Deutsche Post had little presence in the US until last year’s $1bn purchase of Airborne Express, which provided it with a ground operation to complement DHL’s airfreight business.

“The internationalisation of our mail business is not imaginable without the US market”, said Klaus Knappik, head of Deutsche Post’s international mail division.

The $60bn a year US domestic postal market accounts for 30-35 per cent of global volumes.

Revenues at the mail business division for 2003 fell by about 1 per cent to about €12bn ($14.8bn), according to information obtained by FT Deutschland. The company will report its full-year results today.

Deutsche Post has been exploring ways to expand outside its domestic mail business. It has spent more than $5bn over the past five years acquiring smaller companies and plans to increase its presence in Europe.

It plans to invest at least €1bn into the European postal market by 2007. Over the past 12 months Deutsche Post has expanded its mail business with small acquisitions in the UK and the Netherlands.

“The acquisitions have cost us much less than a billion. There is room for more,” said Mr Knappik.

Of the UK market he said: “If we get a permanent licence for mail transport by the British regulator, which we are expecting, we will steadily expand in the UK through organic growth or acquisitions.”