TNT and FedEx run business in China alone

The world’s Big Four express names gradually step into an independent running term in China – which has nodded their activities of operating wholly owned affiliates in the country according to the commitments to its WTO entry – coinciding with two acquisitions.

“The acquisition of Hoau Logistics Group will give us a huge trucking network and help us build a world-level delivery network in China,” said Peter Bakker, chief executive officer of mail and logistics giant TNT and chairman of the Board of Management. “It is in line with TNT’s global strategy and helps us connect China with the Asian trucking network.”

The Holand-headquartered company officially announced the completion of the deal on March 14. The Chinese authorities approved it days ago. However, the company declined to unveil the deal’s accounting information.

“For now, TNT is working on the establishment of a new management team in the Chinese company,” said Diao Ning, senior marketing communications manager of TNT China. “Pang Fuxing, senior strategic vice president of TNT China, is appointed as president of new Hoau Logistics, and Wang Zhenhua, the founder, as adviser.”

Industry analysts point out that the goal of TNT is to integrate its businesses in China on the basis of the Chinese company’s network and 170,000 clients. TNT can not only further it but also regard it as an access bridge to its network worldwide.

TNT China will add its Chinese employee team to 12,000 to 14,000 from 4,000 to 5,000. TNT will try to further foster Hoau Logistics and spend three to five years adsorbing the largest trucking company in China into its own network.

Established in 1995, Hoau Logistics, based in the northeastern Chinese province of Heilongjiang, has set up a nationwide network of more 1,100 outlets covering the country’s big, medium, and small cities and serving a variety of industries such as fast-moving consumer goods, home appliance, and medicine. It has a labor force of over 1,200 and a truck fleet of over 3,000.

Tianjin DTW Group Co., Ltd., another Chinese logistics service provider based in Tianjin, near Beijing, capital of China, announced that its sale of a 50% stake in Federal Express-DTW Co., Ltd. was completed on March 1.

FedEx Express, the world’s largest express transportation company, reached an acquisition agreement about the deal and DTW Group’s domestic express assets valued at about USD 400 million on January 24, 2006.

Since 1999, the Tianjin company had been the sole partner of FedEx Express in China. Through the cooperation between both sides, it grows into a professional logistics company from a freight forwarding company. They created Federal Express-DTW in Beijing in 1999.