Deutsche Post parcel delivery arm to fall short of target

Deutsche Post’s parcel delivery service is expected to fall just short of its target for pretax returns (between 2.6 and three per cent) after receiving the same instructions from the EC. The Commission has forced it to create a separate marketing and sales company for business customers and the shortfall in earnings is being attributed to the cost of setting up the new division.
Peter Kruse, chairman of Euro Express, the parcel delivery arm of Deutsche Post, said the new firm would start up operations in January 2002. It will be based in Bonn, Germany, and initially employ 1,000 workers. The business is expected to achieve a pre-tax return of five per cent by 2005.