DHL tip-toes into US freight market with Midwest acquisition
Deutsche Post DHL has taken a relatively quiet step into the North American domestic freight market, with the acquisition of a regional carrier in the Midwest area. With little by way of publicity, the company acquired Standard Forwarding last week, but told Post&Parcel today that it intends to very much leave its new purchase to its own devices, rather than integrating it into the DHL system, rebranding or even co-branding it.
Standard Forwarding, which is based out of East Moline, Illinois, has 15 terminals consolidated within a few Midwestern states, with 500 employees, 300 trucks operating in Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska and Wisconsin.
The firm has been in business since 1934, starting out as a transportation contractor for agricultural equipment manufacturer John Deere, which remains a key customer, before opening up its transportation services.
The company, which has been reported to have reached a turnover of around $79m by 2008, was hit hard in the recent recession and filed for bankruptcy towards the end of 2009.
A management buyout was completed in the spring of 2010, and since then DHL said the company has restructured and diversified its customer base to improve its financial situation.
Despite its financial troubles in recent years, DHL sees the company as having a strong, loyal customer base and a good reputation in a region of the US that has strong growth prospects with local manufacturers now springing back from the recession.
Under the auspices of DHL Freight, Standard Forwarding will continue to operate on a standalone basis, its relative independence underlined by having a reporting line direct to DHL Freight chief executive Thomas George in Bonn, Germany, rather than to DHL’s Americas business.
In that light, the carrier’s existing management team has been retained to continue growth that has recently seen its service reach expanding to Michigan.
Jennifer Pakradooni, DHL GLobal Forwarding’s director of communications in the Americas region told Post&Parcel: “There are no plans to integrate, although over time we will be leveraging each others’ expertise.”
“Being part of the DHL family provides opportunities to grow their business, of course. The idea is to give them the access they need to grow their business – there’s prospects to expand, looking to Canada and the northern border, and potentially later to the southern border and Mexico.”
Pakradooni would not comment on the exact financial status of DHL’s latest acquisition following its emergence from bankruptcy, but said DHL was “cautiously optimistic” on its growth in the US freight market, building on its strong freight presence in Europe, the Middle East and North Africa.
Acknowledging Deutsche Post’s troubled relationship with North America in recent years, she said it would be “baby steps” going forward, but that there was a positive view on the company regarding the opportunities that exist.
The move to acquire Standard Forwarding fits in with DHL’s key global strategy “pillars” of growth and stability, she said.
“We are really beginning to see how we can positively take advantage of the slow recovery,” she added. “Standard Forwarding have done well diversifying in their customer base, and if business continues to grow, the skies are the limit.”