Deutsche Post has historically had a universal
service obligation, as well as some exclusive
rights, since 2008 the market has been fully liberalised, and Germany no longer formally designates one company to provide that universal
service. Without this pressure, Deutsche Post has
been free to continue exploring international
markets and create new products, while willingly
providing a universal service on business
grounds.
Deutsche Post’s path to privatisation in the
1990s was motivated by losses caused by an
inefficient organisation and EU directives, rather
than as a response to falling mail volumes.
Before 1989, a state-controlled company,
Deutsche Bundepost, was in control of all postal
and telecommunications services. This company
adopted the bureaucratic structure of its governing bodies that was inappropriate for a
market-oriented company, leading to complex
processes, no bookkeeping and no coherent
strategy for marketing and sales. The result was
heavy losses, with a deficit of €320 million in
1990 alone. The first round of postal reform in
1989 separated the different services and
restructured them into corporate organisations,
quickly reversing their fortunes. When EU
directives on opening up postal markets to
competition were released, Germany scheduled
the privatisation of Deutsche Post, which began
in 2000.
Deutsche Post stated its aim to become a
globalised logistics company in 1997, as it
became clear domestic markets would be
exposed to increasing competition. The 1997
Postal Act laid out the regulations to induce
greater competition in the German postal market.
One of the main policies of this act was the
removal by 2002 (later extended by six years in
2001) of Deutsche Post’s exclusive licences on
some postal products. Consequently, Deutsche
Post began its globalisation strategy to become
“the number-one global player”, not only to
escape a tightening domestic market, but also to
access the rapidly growing express, courier and
parcel markets in Europe and globally. This
transition began with some smaller acquisitions
and new international services, but large acquisitions did not occur until after privatisation in
2001.
Following privatisation, Deutsche Post launched an intensive programme of diversification
through acquisitions and the divestment of
non-core activities. Privatisation afforded
Deutsche Post the freedom to use its strong
internal cash flows to pursue larger acquisitions.
DHL, a US express logistics company, was
acquired in 2002 for €2.4 billion, just a year after
Deutsche Post’s privatisation; Exel, a UK-based
logistics company, was acquired for €5.6 billion
in 2005. These gave Deutsche Post an immediate
foothold in new markets, transforming it from a
Fig. 23 Since the early 2000s, Deutsche Post’s revenue has come from several areas; total revenue has not been
appreciably reduced by declining domestic letter volumes. Source Vivid Economics
78
W. Xiaoming et al.
service obligation, as well as some exclusive
rights, since 2008 the market has been fully liberalised, and Germany no longer formally designates one company to provide that universal
service. Without this pressure, Deutsche Post has
been free to continue exploring international
markets and create new products, while willingly
providing a universal service on business
grounds.
Deutsche Post’s path to privatisation in the
1990s was motivated by losses caused by an
inefficient organisation and EU directives, rather
than as a response to falling mail volumes.
Before 1989, a state-controlled company,
Deutsche Bundepost, was in control of all postal
and telecommunications services. This company
adopted the bureaucratic structure of its governing bodies that was inappropriate for a
market-oriented company, leading to complex
processes, no bookkeeping and no coherent
strategy for marketing and sales. The result was
heavy losses, with a deficit of €320 million in
1990 alone. The first round of postal reform in
1989 separated the different services and
restructured them into corporate organisations,
quickly reversing their fortunes. When EU
directives on opening up postal markets to
competition were released, Germany scheduled
the privatisation of Deutsche Post, which began
in 2000.
Deutsche Post stated its aim to become a
globalised logistics company in 1997, as it
became clear domestic markets would be
exposed to increasing competition. The 1997
Postal Act laid out the regulations to induce
greater competition in the German postal market.
One of the main policies of this act was the
removal by 2002 (later extended by six years in
2001) of Deutsche Post’s exclusive licences on
some postal products. Consequently, Deutsche
Post began its globalisation strategy to become
“the number-one global player”, not only to
escape a tightening domestic market, but also to
access the rapidly growing express, courier and
parcel markets in Europe and globally. This
transition began with some smaller acquisitions
and new international services, but large acquisitions did not occur until after privatisation in
2001.
Following privatisation, Deutsche Post launched an intensive programme of diversification
through acquisitions and the divestment of
non-core activities. Privatisation afforded
Deutsche Post the freedom to use its strong
internal cash flows to pursue larger acquisitions.
DHL, a US express logistics company, was
acquired in 2002 for €2.4 billion, just a year after
Deutsche Post’s privatisation; Exel, a UK-based
logistics company, was acquired for €5.6 billion
in 2005. These gave Deutsche Post an immediate
foothold in new markets, transforming it from a
Fig. 23 Since the early 2000s, Deutsche Post’s revenue has come from several areas; total revenue has not been
appreciably reduced by declining domestic letter volumes. Source Vivid Economics
78
W. Xiaoming et al.