DHL Express will exit the domestic express markets in Australia and New Zealand by selling its50% stakes in two joint ventures to long-standing partner New Zealand Post for NZ$108 million (€68
million), it was announced today.The deal will enable NZ Post to expand its express and parcel activities as a key growthbusiness while DHL Express will focus on the international express markets in the two countries infuture, while continuing to work commercially with the domestic operators.
NZ Post (NZP) announced it has agreed to buy DHL’s 50% stake in Express Couriers Limited (ECL)in New Zealand and its 50% stake in Australian company Parcel Direct Group Pty Limited (PDG), whichowns Couriers Please Pty Ltd (CPPL). The purchase will make both ECL and PDG/CPPL wholly-ownedsubsidiaries of NZP.
NZP CEO Brian Roche said the agreement represented a significant step in delivering the NewZealand Post strategy. “Express delivery is a core element of our current and future strategy.Given the growth in the parcel and courier segments, this strategic purchase supports our effortsto adapt the overall business to meet our customers’ changing needs and expectations,” hedeclared.
“We continue to observe a dramatic decline in the amount of letter mail in our traditionalpostal network while at the same time parcel and courier volumes are growing steadily, on the backof growth in e-tailing and e-trading. Having full alignment between New Zealand Post and ExpressCouriers Limited will allow us to better match our product offerings to customers’ needs, and as wehave previously indicated, explore the benefits of further aligning our postal and couriernetworks. We can only achieve this if we have full ownership of ECL.”
Roche also stressed that both NZP and DHL had benefited from the successful joint venture overeight years, and their relationship would remain strong, changing from a model based on ownershipto one based on contract. Under a commercial agreement as part of the sale, NZP and DHL Expresswill support each other’s express delivery operations, at a global level through DHL Express,domestically in New Zealand through ECL and in Australia via CPPL.
Gary Edstein, Senior Vice President Oceania, DHL Express, said that DHL Express has enjoyed along and successful joint venture with New Zealand Post. “DHL and NZ Post’s relationship is builton mutual trust and understanding. Together we’ve created a business that has strong brandawareness and solid operational processes and no longer requires a joint ownership model to ensureits success. DHL is excited about the opportunity to focus on our core business: international timedefinite delivery.
He added: “DHL is committed to delivering a high level of international express services onbehalf of New Zealand companies and we are committed to continuing our relationship with the ECLgroup as our preferred New Zealand Domestic Express Partner.”
DHL Express spokesman Dan McGrath told CEP-Research: “In future we will focus on our corecompetence of time-definite international express. New Zealand Post will remain a partner for us,and we will move from an ownership to a strategic partnership model.”
In New Zealand, Express Couriers Limited (ECL) was formed in 2004 through the amalgamation ofNew Zealand Post’s courier and freight operations, and was then made part of the joint venturebetween NZP and DHL in early 2005. The company offers express delivery services in New Zealandthrough the market leading brands of CourierPost, Pace, Contract Logistics and Roadstar, andinternationally via the DHL Express network. ECL, which competes with Freightways, has more than1,000 vehicles and some 900 delivery staff.
ECL CEO Mark Gibson said: “ECL customers will continue to receive the same high level of servicefrom the company, and continued access to DHL’s global reach. The brands, management team and focuson the marketplace are preserved. We are excited about this step in our development. We are alsolooking forward to working even more closely with New Zealand Post, and refining a wider offeringof services.”
In Australia, Couriers Please Pty Ltd CEO Harlis Malkic said it is ‘business as usual’ andCouriers Please will continue to focus on being Australia’s leading metropolitan express parceldelivery provider. “Our customers will continue to receive the excellent levels of servicecurrently provided,” he said. Couriers Please, with some 700 staff and contractors, delivers abouteight million parcels a year.
Parcel Direct Group was set up in 2008-09 with the merger of six regional companies (CouriersPlease, Parcel Overnight Direct, Hills Transport, Northern Kope Parcel Express, Vicfast Couriersand PEP Transport) that had been previously acquired by the two joint owners. The aim was to createa new Australia-wide network to compete with market leaders Toll Group, TNT Express and AustraliaPost/Star Track Express.
However, PDG faced challenging trading conditions and New Zealand Post revealed last year thatpart or all of the business would be divested. VicFast, Hills, Northern Kope and PEP Transport wereall sold off during 2011. Parcel Overnight is already fully owned by New Zealand Post.
