FRANKFURT Deutsche Post is aiming for a global expansion of its parcel delivery business and wants to become world No. 1 by 2020, its CEO said, betting on a boom in the delivery of parcels ordered from websites such as Amazon.com Inc.
Like other postal companies, Deutsche Post is benefiting from the rapid growth in online retail sales, seen doubling in Europe from 2012 levels to around 323 billion euros ($438 billion) by 2018, market research firm Mintel forecasts.
Already the world's biggest postal and logistics group, Deutsche Post aims to replicate that position in parcels and Chief Executive Frank Appel told the company's annual shareholders' meeting it would consider re-entering European markets it had exited, such as France and Britain, as well as growing further afield.
"We want to apply our successful German parcel strategy in other countries," in Asia and the Americas as well as in Europe, he told the meeting on Tuesday.
"We intend to remain the number one in Germany and expand our position. We also intend to become the global number one in this business by 2020," Appel added.
Deutsche Post currently makes about three-quarters of its revenue from its DHL logistics units, comprising express courier, forwarding and supply chain services. The rest comes from mail and parcels.
The company holds a 42 percent market share of Germany's 8.2 billion euros ($11.2 billion) parcel delivery market and competes with DPD, majority-owned by France's La Poste; Hermes, owned by Germany's Otto group; United Parcel Service; FedEx; and General Logistics System of Britain's Royal Mail Group.
TIME WILL TELL
According to UPS's website, it is the number one in the United States, delivering 4.3 billion parcels and documents last year, and has a daily delivery volume of 16.9 million items.
Responding to questions, Appel said Deutsche Post's DHL express courier business had exited domestic delivery in some countries in Europe such as France and Britain because of the substantial losses it had racked up there.
"We will now examine whether it makes sense to enter again these markets," he said, adding: "Time will tell whether we want to have our own activities or whether we will offer them together with partners."
DHL sold its domestic parcel delivery units in France and Britain in 2010 and in Romania in 2012. In 2009, following tough competition with UPS and FedEx, as well as the effects of the global financial crisis, it closed its air and ground domestic business in the United States to focus on international shipments.
Appel's presentation charts on Tuesday showed Deutsche Post expects annual growth rates in the German parcel market at between 5 and 7 percent from 2011 to 2020.
During the same period it expects global annual growth rates in the international express market at 5 to 6 percent, air freight forwarding at 2 to 3 percent, ocean freight forwarding at 4 to 5 percent and contract logistics at 5 to 6 percent.
(Editing by Mark Potter and David Holmes)