DHL challenge provides 'opportunities'

Kuehne+Nagel sees ‘upside’ for its contract logistics business in Britain following the $6.7bn takeover of Exel by acquisitive German rival DHL.

Dirk Reich, K+N executive vice-president of contract logistics, said: ‘On the one hand we are worried, because DHL has unlimited funds.

‘It can take profits out of a subsidised industry and invest them in consolidation [of the logistics industry].

‘And Germany’s railway, Deutsche Bahn is starting to do the same thing with Schenker.’

But Mr Reich observed that for some shippers the enlarged DHL had now become the sole supplier of contract logistics, a situation which would see shippers seek a second provider.

‘Lots of customers are going out for an RFI [request for information] and they may split the business,’ he added.

Peter Ulber, K+N’s chief executive for northwest Europe based in Britain, agreed: ‘There are definitely opportunities as well as challenges.

‘In British contract logistics, for example, DHL and Exel together have a combined market share of 25%.

‘I would argue that such a position is not sustainable and that the numbers two and three, K+N and Wincanton, will get some of that business.’