TNT Logistics close to finding buyer
David Kulik is in charge of one of Jacksonville's biggest logistics companies — but he spends two thirds of his time out of the country.
Most of that time is spent in Amsterdam, Netherlands, where TNT NV, the parent company to Kulik's company, TNT Logistics, is based. Shortly, though — as soon as the next several weeks — Kulik's airline tickets are unlikely to take him to Schiphol Airport.
The big question is what destination will take its place.
Six years after TNT bought the logistics business from CSX Corp., the Dutch company is looking to sell the second-largest contracts logistics company in the world.
The intent to sell was announced toward the end of last year, and although the company refuses to divulge who has expressed an interest, industry observers have floated a variety of names, including big players like UPS.
In the past seven months, TNT NV has met with four dozen interested companies, a number that it has now narrowed down to single digits.
A final decision is expected in the coming weeks, despite the fact that when the company announced that it was putting TNT Logistics on the block, it said the sale would take nearly a year to complete.
The search for a buyer has "gone faster than we thought," said Kulik, who holds a variety of roles in the company, serving as group managing director for the entire logistics business as well as head of the North American operation that is headquartered in Jacksonville. He is also one of the five board members of TNT.
"There's been a lot of interest in our business … a tremendous amount, more than we even anticipated," he said. "We're getting to the point where the final buyers are getting clarity. I think they'll understand soon all the complexity of the business."
That wealth of interest stems in part from TNT's strong position in the industry as well as a general consolidation in the marketplace: In the past year, the logistics arena has seen a flurry of acquisitions, including Deutsche Post World Net's acquisition of Exel, a 6.7 billion USD deal that created the world's largest logistics company. TNT was involved as well — in this case on the buyer's side ÑÊwith the purchase of Wilson Logistics, which added freight management services to the company's offerings.
Even as the industry is shrinking, TNT has maintained its hold, with 800 customers and 4.3 billion USD in revenues. It's in second place behind Deutsche Post, owner of express delivery company DHL, with company-wide revenue of 61.6 billion USD.
But TNT has found it hard to focus on that tighter marketplace and also handle its other businesses, leading the parent company to decide to exit the logistics business, Kulik said.
TNT will remain active in its two other business lines delivering the mail in the Netherlands and handling express shipments in Europe and Asia because both of those businesses fit well together, requiring the same sort of network of delivery people and mail drops. The logistics business, in which TNT operates everything from a distribution center in Orlando for Otis Elevator Corp. (a project the company announced last month) to an automotive parts warehouse for Ford Motor Co. in Kansas City, Mo., doesn't work along the same lines.
"We'll build a warehouse wherever our customers want us to," Kulik said. "You really have to make choices. We couldn't find the same level of synergy between network operations and logistics."
But getting out of that business might be a bad move by the parent company, said Evan Armstrong, president of Armstrong & Associates Inc., publishers of Who's Who In Logistics.
"They've made a strategic decision to only handle portions of customer supply chains," Armstrong said.
That will mean better financial results in the short term, "but it's a decision that's counter to the ongoing trend and might be a bit short-sighted in the long term."
Still, for the logistics division including the 350 employees in Jacksonville the sale might be a good thing, giving them a parent company focused on the business, Armstrong said.
Kulik also thinks the sale will be good for Jacksonville workers.
"We will protect all the jobs we have in Jacksonville," he said. "The buyer is counting on the fact that we will continue delivering on our contracts."
"Depending on who buys us, we might even be adding jobs."
