DHL quits Austrian domestic parcels market and delivers through Austrian Post
Deutsche Post DHL is quitting the Austrian domestic B2C parcels market and will partner instead with Austrian Post for cross-border parcel deliveries to Austria, the two companies announced today.
The Austrian postal operator will take over most of DHL Parcel Austria’s 220-strong workforce and its three sorting centres under the agreement, which requires approval by competition authorities in the two countries. But the DHL unit will remain in business, handling export parcels from Austria. No financial aspects of the partnership have been disclosed.
The strategic partnership, expected to start later this year, marks the end of DP DHL’s €100 million expansion into the Austrian parcels market over the past three years, follows Amazon’s move to start delivering its own parcels in the country and comes amid wider restructuring measures at the German mail and logistics giant.
DHL Parcel Austria delivered some 36 million parcels last year, including 27 million domestic parcels (including for Amazon) and about 9 million export parcels. Austrian Post, which delivered 108 million parcels (B2C and B2B) across the country last year, will thus increase its leading 59% share of the B2C market by taking over a large part of DHL’s volumes.
Deutsche Post DHL explained that through the partnership customers would benefit from high-quality parcel delivery services, including short delivery times for shipments, enabling both parties to grow profitably and jointly tap the potential of the growing cross-border e-commerce business.
“The expansion of our parcel business in Europe is proceeding successfully. This has culminated in a very attractive agreement which enables us and Austrian Post to strengthen and accelerate our growth in Austria and beyond. We will be exploring additional collaboration opportunities with Austrian Post in the future as we continue to focus on developing our international e-commerce business as a key growth driver for our Group,” said Frank Appel, CEO of Deutsche Post DHL Group. “The agreement is a further step towards improving our quality and productivity in the European parcel business.”
A company spokeswoman told CEP-Research: “The market for cross-border parcel delivery is undergoing a major transformation. The growth of e-commerce opens up new opportunities, but also leads to the emergence of new competition. The rapid changes in the competitive environment for parcel delivery companies, driven by the e-commerce boom, have prompted us to examine our strategic options. Against this background, we have decided to outsource delivery within Austria. Austrian Post has made the best offer in terms of quality and cost-effectiveness."
She added: “DHL Parcel Austria will continue to take care of large customers with shipments from Austria to other countries.” Deutsche Post DHL stressed that the agreement has no impact on its business activities in international express, freight transport and supply chain solutions in Austria.
DHL Parcel entered the Austrian market in 2015 as part of its expansion into various European markets and with Amazon as a major customer. The German group announced it would invest €100 million to build up an operational network. Two sorting centres have so far gone into operation, near Vienna and near Graz in the south of the country, and the third, at Enns close to Linz, is due to go into operation this summer.
However, Amazon is now building up its own Austrian logistics and delivery operation, based on a new fulfilment centre near Vienna. The e-commerce giant started deliveries in the capital last autumn.
Georg Pölzl, CEO of Austrian Post, commented: “We are delighted to have Deutsche Post DHL Group as our partner. Our nationwide delivery throughout Austria stands for quality and reliability. Pick-up stations, self-service zones, reception boxes and the features of our app are unique and are very well received by our customers.”
A company spokesman confirmed to CEP-Research: “We will take over (the three depots in) Wien/Liesing, Wundschuh near Graz, and Enns in Upper Austria.”
The partnership will bring Austrian Post closer to its target of 150 million parcels a year earlier than the current target date of 2022, while the three DHL Parcel depots will increase its overall sorting capacity.
According to the recently-published ‘CEP Radar’ from consultants Kreutzer Fischer & Partner, DHL Parcel had 27% of the Austrian consumer parcels market last year, well behind Austrian Post but clearly ahead of Hermes (12%) and DPD (10%).
The overall Austrian CEP market grew by 9% to 228 million parcels last year, with 58% of these B2C and 42% B2B shipments, the study said. Austrian Post increased its volumes by 11% to 108 million parcels.