King Larry: The story of Larry Hillbloom

Paul Jackson reviews James D Scurlock’s book, published this month, about the cofounder of DHL, a globalisation pioneer and elusive billionaire.

Those of us in the freight business in the 1970s will remember an upstart courier called DHL building a document, parcel and then freight business via the excess baggage system of the grateful airlines, and will find this a fascinating exposé of the “Howard Hughes” of the industry… Larry Hillbloom.

Award-winning author James Scurlock, clearly with the support of many former colleagues of Larry, as he was always called, has written a brilliant story of a visionary genius who would never accept “no” from the many obstructive bureaucrats.

The major protagonists are the US/Civil Aeronautics Board, Loomis (who tried to buy DHL and then close it), USPS, Hong Kong Post Office and later many others who all set out to strangle at birth from 1969 a whole new way of expediting around the world, particularly bank and shipping documents, the supposed preserve of the licensed freight forwarders or monopoly post offices.

As we know, they all failed, but I certainly didn’t appreciate that it was DHL who broke the USPS domestic postal monopoly that allowed Federal Express to get off the ground (after winning air rights) five years after DHL had been incorporated.

Running out of cash in the early ’80s from a phenomenal growth, Pat Lupo – the patient and reliable CEO and another lawyer – sought to sell out and become the international division of FedEx or UPS. However, it ended up at Larry’s suggestion with a 25% partnership (of the non-US DHL) with Japan Air Lines (JAL) which then at the last minute also became another 25% sale to Lufthansa who “overnight” accepted the 12 months’ due diligence already completed by JAL.

One can now certainly understand more the legal nightmare that the express carriers, led by Hillbloom, had in the ’80s and ’90s to force a superior new product into a traditional and complacent postal and freight industry.*

Larry became increasingly disinterested in DHL and spent the rest of his life building hotels, golf courses, et cetera, mainly in Vietnam before the US embargo was lifted and avoiding the taxmen.

In 1995, after his death, the US tax authorities were seeking $95m from the sale of his shares and $270m from DHL in back profits.

Along the way, Hillbloom – who avoided meeting people, especially DHL executives – became a tax exile in Saipan, part of the Pacific Islands of Micronesia (by running for the local congress), bought airlines and much more and built the world’s first Arabic word processor.

He clearly had a weakness for young women that meant it took 10 years to sort his estate out (five “wives/girlfriends” came forward and four children ended up beneficiaries), when he was killed in his own not-well-maintained plane in 1995. The US tax authorities still believe that he is alive and that the crash was a major stunt to avoid taxes!

The remaining third of the book is devoted to the probate hastle between the “no win no fee” lawyers of various parties, which says more about the litigious American society than Larry’s wish to leave all his estate to medical research, which in the end was left 40% of approximately a $1bn.

Larry was holding 25% of DHL International shares, and on his death DHL bought them for $140m and then sold them for $420m to Deutsche Post a year later! But that’s another book, perhaps.

In some ways the book reads like a novel. It gets into a lot of descriptive detail which an industry observer might find distracting, but if you are in the industry then it is certainly a good read.

The fact is that if it wasn’t for people like Larry Hillbloom, Fred Smith, and Gordon Barton** (IPEC/SKYPAK/TNT) we wouldn’t have an express industry at all. Be grateful that for all his flaws, and his crazy lifestyle, Larry Hillbloom built a whole new industry. So he is still, to me, “King Larry” for his innovation, vision and cavalier approach to the establishment.

Further Reading/Viewing:
* “The Rise of Global Delivery Services” James I. Campbell Jr from Amazon
** “ Gordon Barton: Australia’s maverick entrepreneur” Sam Everingham
Film: Shadow Billionaire