Growing German postie targets region's mailboxes

Growing German postie targets region’s mailboxes
From THE AUSTRALIAN, April 11th, 2001

Florence Chong * Expansion DEUTSCHE Post, the rapidly growing German logistics company, sees the
Asia-Pacific region as offering the best potential for growth in its global
expansion. The company, which has just moved its Asia-Pacific headquarters from Singapore
to Sydney, operates offices in Singapore and Hong Kong. Deutsche Post Asia-Pacific regional manager Gordon Lang said the company
planned to expand to other countries in the region. It has previously indicated
it plans to expand into Taiwan and Japan. Mr Lang said Deutsche Post would focus on handling international mail from
Asian countries. Once, under a United Nations charter, countries were bound by an agreement
covered by the Universal Postal Union which set the conditions on the delivery
of mail between countries. Mr Lang said in the past 20 years many countries, including Australia, had
sought new and more efficient ways of getting international mail delivered. This shift had allowed players such as Deutsche Post to target markets outside
Germany by offering attractive rates and efficient services. Three years after entering the competitive Australian market, where the
outbound mail market is estimated to be worth $225 million a year, Deutsche
Post now ranks behind Australia Post and TNT. Mr Lang said Australia was the
largest market in the Asia-Pacific. Although the pace of deregulation in mail delivery was slower than
telecommunications through the Asia-Pacific, Mr Lang said the push to
liberalise the sector on an international level was strong. Nevertheless, he
said: “We have agreements with several Asian countries to deliver their
international mail.” The advent of the internet had reduced the volume of individual mail but Mr
Lang said this was more than offset by the rapid growth in direct mail of
publications and financial statements. Companies such as American Express processed monthly statements in Sydney, then
direct mail companies delivered the statements throughout the region. Mr Lang said increasingly Sydney was becoming the processing and distribution
hub for financial services companies that were rationalising their global
operations to counter the rising cost of investment in equipment and technology. Overseas operations account for a growing share of Deutsche Post’s annual
revenues. In 1999, domestic operations made up 90 per cent of its profit. Last year, that
proportion dropped to 74 per cent. Deutsche Post is the largest postal company in Europe and the world’s second
largest by turnover (32.7 billion euros in 2000). The group has invested heavily in the past two years to widen its global reach,
including the acquisition of the huge US freight forwarding company Danzas AEI
and lifting its stake in international freight company DHL from 22.5 to 51 per
cent last November. With these acquisitions, Deutsche Post has positioned itself as a leading
logistics company in the global market. Edition: 1; Page: 031; Section: FinanceTHE AUSTRALIAN, 11th April 2001