DPD on the expansion trail

The Deutscher Paket Dienst (DPD) has an exciting and successful year behind it, as the senior management of the courier, express and parcel services provider told journalists at a recent press conference in Frankfurt! Main.

"Moin*, Bonjour, GrUss Gott!**" ** Austrian], the deliberately informal words of greeting by Arnold Schroven, spokesman for the DPD executive board since the beginning of 2002, made it clear that DPD is more international than ever. The business, founded by a group of leading German forwarders in 1976, experienced its most recent impetus in this direction through the massive involvement of the French La Poste Group, which started in early 2001. The French state postal service now controls no less than 85% of the equity thanks to the purchase of key holdings from what is known as the Frankfurt Circle" (der Frankfurter Kreis).
The French power behind the throne in DPD is Dr. Claude Begle, head of the La Poste Group subsidiary GeoPost, who speaks flawless German and thinks globally. He let Arnold Schroven, who succeeded the long-serving DPD head Peter Hoffmann — he stepped down from the business voluntarily at the end of 2001 hut continues to serve in an advisory capacity
— enjoy the limelight at the press conference. Nonetheless, Béglé was obviously in the driving seat when it
came to discussing strategic issues. A clear indication that in future the course will be set in Paris and not in Aschaffenburg. Eli bien, c’est la vie…

Offensive in Central and Eastern Europe

However, back to firm facts:
DPD increased volumes — Europe-wide — by just under 6% to around 355 million packets, which represents a sustained reinforcement of its leading position in the market. Revenues increased to EUR 1.61 billion. Schroven reported that DPD achieved most of its volume growth outside Germany — double digit growth was achieved in some national markets. In contrast, DPD only exhibited <> growth in Germany, which nonetheless translates into a healthy 3% increase. Schroven also spoke about the prospects:
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Béglé too could see lots of potential, especially in Central and Eastern Europe (CEE). and his observations on this subject marked the start of the <> of the press conference. And it is here that the parcels specialist will seek to expand in the coming years, added the agreeable Frenchman, because the most important states in this economic zone would soon be full members of the EU, and DPD wants to be fully prepared for this development. DPD would make a start in Poland before the first half
of 2002 is out. Negotiations with a Polish contractual partner are on the verge of being concluded. The Polish partner has an appropriate national distribution network already in place. Rapid expansion in the three Baltic states is also planned for the near future. Posten Sverige AB, with which DPD recently concluded a cooperation agreement, will provide a vital entrée to this market. The Swedish postal services provider has its own subsidiaries in the Baltic states (Estonia, Latvia, Lithuania).
Negotiations with Russia are also proceeding very well. Similar moves are afoot in Slovakia and Slovenia. In all these initiatives DPD is determined that it will maintain its high quality standards in all the new CEE markets.
Europeanisation of services

2002 will be a historically significant year for DPD for another reason, as in the middle of the year the company plans to roll out its first genuine express product, said Dr. Armin Bohnhoff, the number two in the DPD hierarchy. The CEP services provider has gained valuable experience in this area with its <> product that has been on the market for just under two years, representing a hybrid between the classic parcel and the — vet to be provided — genuine express service.
Bohnhoff continued < a! Express. This means that right from the start we can offer the new product internationally.>>
DPD believes that it can realistically hope to attain a turnover r in express services of between 0.5 and 1 million individual consignments this year. liie move into the express business is necessary because big customers in particular are looking for a single partner that can offer them a one-stop shop for all their )stal service requirements. As far as Bohnhoff is concerned, this initiative must also include < Bohnhoff went on to say that the introduction of the euro has been a help." The decisive factor in expanding the coverage of POD services to other European countries is the use of powerful I packages to get an accurate, real-time picture of the cash flows generated by these services. In practice this means that "within 48 hours of collection, the pay-
ment must be credited to the shipper’s account.

Lean cost structure and tight quality control

In addition to the growth of volume and revenue, a flatter. leaner management structure is also on the agenda for this ear and next. Schroven says this is a big challenge for everyone concerned. Another firm decision is that all rates are to increase by 5% from April 1 2002. Begle emphasised that this move was unavoidable in view of price increases on one hand, and the desire to push forward the expansion of DPD, on the other. In Béglé’s own words: <>
Speaking of clarity. the journalists present were astonished at the relaxed attitude displayed by the majority stake holder in 1)PD, La Poste Group. toward the remaining 15% of the share capital that it does not control. Does the German Parcel. which acquired the shares ot the former DPD partner Dachser — now, via GLS, 80% owned by the British postal services provider Consignia plc — not represent something of a cuckoo in the nest? Arnold Schroven was reassuring: "The three partners in DPD work extremely well together. There is no need to take action.>>
Bégk commented: "We are interested in acquiring the remaining equity, provided that the price is right.>> No question about it, the future at DPD will he an exciting one.