Driven by aggressive international expansion, Deutsche Post reported a profit in 2003. In the coming year, the logistics firm's management plans more of the same, casting its eye towards the lucrative American market.
Deutsche Post wants to be a global player.
Despite €1.2 billion ($1.5 billion) in losses in part due to the strong euro, 2003 was a good year for Deutsche Post, according to figures released at a press conference on Tuesday. Profits reached a record high of €2.98 billion, while business volume grew 1.9 percent to €40 billion. The fact that Klaus Zumwinkel, the head of Deutsche Post, had good news for his shareholders was largely due to the company's ambitious international expansion efforts.
Deutsche Post -- a global player
Represented in more than 220 countries with more than 383,000 employees, Deutsche Post has long since outgrown Germany's borders. Stagnation in the domestic market prompted the company to look abroad for new opportunities -- with great success. More than half of last year's profits came from international ventures.
In the last few years, Deutsche Post's management made key decisions aimed at making the company a global player in the international post, package and logistics market. With the purchase of the U.S.-based company Airborne, Deutsche Post became the third largest provider of express services in the U.S.-market. And in Europe, Deutsche Post is exploiting opportunities arising from the liberalisation of the postal services market -- once characterised by strictly-controlled monopolies -- to expand into Great Britain and the Netherlands.
In 2004, more oversees expansion efforts, particularly in the U.S., are expected to drive profits up. "Our goal is clear," Klaus Zumwinkel told DW-WORLD. "By 2005, we want to be the world-wide number one player in logistic services." Zumwinkel plans to invest €1 billion over the next three years.
More international expansion ahead
A top priority is the U.S.-market, which is among the most liberal in the world. "We can't imagine internationalising our letter services division without expanding into the U.S.," Klaus Knappik, the head of letter services at Deutsche Post, told the Financial Times Germany. With a yearly business volume of $60 billion, the US market represents 30 to 35 percent of the world's letter business.
Also, Deutsche Post plans to take advantage of the recently privatised markets in Austria and Denmark and pursue a greater share of the growing Asian market. To achieve the latter, Deutsche Post is in the process of building an internal transportation network in China, with 290 distribution centers.
Diversification and internationalisation has proven a smart business plan for Deutsche Post, one which has certainly pleased shareholders. For the fourth year in a row, the company increased dividends. With globalisation and the increased importance of international trade, Deutsche Post -- with its global distribution network -- is well positioned to take advantage of the changes.