Deutsche Post has outgrown its mailbox origins. Doing business as Deutsche Post DHL, the company divides its operations between delivering the mail in Germany (Deutsche Post) and being one of the world's leading providers of express delivery and logistics services (DHL). As Deutsche Post, it delivers about 66 million letters a day to more than 42 million customers (about half of the German population). DHL handles the international express delivery, freight forwarding, global mail, and supply chain business. Overall, DHL-branded business activities account for the majority of Deutsche Post DHL's sales. The company's largest market is Europe, which accounts for about two-thirds of sales.
Deutsche Post DHL operates through four divisions - Express, Freight Forwarding, Global Mail, and Supply Chain. Deutsche Post only encompasses the group's German mail service. And as electronic communication grows, the company is reevaluating its legacy operations. Demand for mail delivery has trended downward; and while that's good for the earth, it's bad for business. In 2010 Deutsche Post's market share for German mail service fell slightly to 86.6%. In response Deutsche Post DHL is investing €750 million to modernize its parcel network in Germany to accommodate an uptick in e-commerce business. The company also plans to substitute mail shipped by air for less-costly ground transportation.
It also launched a new product in mid-2010 that uses email to send registered mail. The E-Postbrief is an electronic message that is also a binding legal document and costs the same to send as a normal letter. Companies such as insurance firms Allianz and Zurich Financial Services and software giant SAP have signed on to use the E-Postbrief, which is delivered instantly, saving time and resources, but also generating revenue for Deutsche Post DHL.
The company expects the most growth to come from its DHL-branded services, which handle the international express delivery, freight forwarding, global mail, and supply chain business. Deutsche Post DHL drastically reduced its offerings in the US, where FedEx and UPS lead the market, to focus on emerging markets in Asia, where much of the world's goods originate. In late 2008 it slashed 9,500 US jobs -- around 73% of its DHL Express (USA) workforce and closed hundreds of offices. DHL Express (USA) subsequently eliminated air and ground services within the US; maintains its international shipping services to and from the US and offers supply chain management through subsidiary Exel. (The company sold Exel's freight brokerage and intermodal services). It also sold its domestic express operations in France and the UK in 2009 and discontinued its bulk mail business in the Netherlands in 2011. The divestment followed a restructuring of the Express division in an attempt to make operations leaner and more streamlined.
With resources freed, the company is looking to strengthen its international express services and its freight business. While revenues for the express division were down 4% in Europe in 2010, sales in Africa, the Americas, Asia, Eastern Europe, the Middle East experienced double-digit growth by as much as 30%. In China, DHL-Sinotrans International Air Courier, its joint venture with Sinotrans, is one of the country's top express delivery firms, but the company is selling its stake due to a change in China's legal framework. DHL Global Forwarding, its air and sea freight business, took over LifeConEx, a joint venture it formed with Lufthansa in 2005. LifeConEx offers supply chain services for pharmaceutical and biotech companies. The company sees pharmaceutical shipping as a key growth area in both developed and emerging markets.
Deutsche Post evolved from a government-owned mail service to a publicly traded company with worldwide delivery and logistics operations. The German government controls a 31% stake in Deutsche Post DHL through KfW Bankengruppe. – less