Exel signs European strategic partnership

Exel, the UK based logistics and freight forwarding operator, has announced a strategic partnership with Militzer & Muench (M&M) one of Europe’s largest freight companies. The deal will give Exel greater geographic scope throughout Germany, central and eastern Europe, as well as the CIS states, central and eastern Asia.

The partnership will suit both parties. Exel has been looking at ways in which it can expand its capabilities across these regions for some time whilst the deal will give M&M enhanced access to Exel’s global network. M&M is present in the air, road and rail markets as well as operating 180,000 sq m of warehousing, 70,000 sq m of which is based in Germany. It is also part of one of the largest German ground networks, System Alliance which enables it to compete with the networks of operators such as Danzas and Schenker. In 2002 the company reported revenues of €376m and employed 2,300 staff.

Although Exel is one of Europe’s largest contract logistics operators, it has a heavy bias to the UK market. Only 14% of the company’s logistics turnover is drawn from continental Europe and it is relatively weak in the high growth eastern European markets. One of the options available to Exel would have been acquisition, but the management has a well documented aversion to major acquisitions which carry high levels of risk. The partnership with M&M opens up many opportunities for the company. However it will still lack the level of strategic control which competitors such as Danzas and Schenker exert in the region through their owned networks.

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