Discussion Papers

Antonia Niederprüm

Geschäftsstrategien von Postunternehmen in Europa

Nr. 296 / Juli 2007

Summary

Since the 1990ies the former postal administrations in Europe have been transforming into increasingly independent and commercially oriented companies. At the same time, these postal operators are challenged as they have to react to the competition their core markets are increasingly exposed to. This study analyses the different strategies four major postal operators have adopted to meet these challenges: German Deutsche Post, French La Poste, British Royal Mail and Dutch TNT. The operators’ strategies are compared with respect to 1) international expansion; 2) network of postal outlets; 3) optimization of postal logistics.

Starting from their traditional core activities – nationwide delivery of letters and parcels – the “Big Four” have extended their activities across countries and to new services. They have established Europe-wide parcel and express networks by means of acquisitions, franchising and strategic partnerships. Deutsche Post and TNT – both listed on stock exchanges – today provide express services worldwide. While TNT discontinued the logistics business in late 2006, Deutsche Post pushed forward this business by acquiring British logistics giant Exel the very same year. Furthermore, both Deutsche Post and TNT have entered foreign letter post markets: i. a., TNT delivers letters in Germany, Austria, and Italy and Deutsche Post runs delivery operations in the Netherlands and Spain; while both have entered the British mail market.

For all postal operators, operating a nationwide network of postal outlets is a costly endeavour. Forced by the enhanced cost awareness implied by privatization as well as by dawning competition, postal operators seek to downsize their networks of postal outlets and, in addition, substitute traditional post offices operated by own staff for franchised agencies that provide postal services. In order to increase revenues generated in postal outlets, some postal operators offer a full range of financial services through their network. For example, the postal banks of Deutsche Post and La Poste offer full-scale financial services in postal outlets, including loans. In contrast to Deutsche Post and TNT, the public networks of British Post Offices Ltd. and French La Poste receive financial support from the state.

Optimizing postal logistics is another opportunity for cost saving and helps improving reliability quality of service. While TNT and Deutsche Post went through massive network re-structuring in the 1990ies, La Poste and Royal Mail started the modernization process more recently. This time-lag may be one explanation for the observation that Deutsche Post and TNT achieve significantly higher profit margins in their letter businesses than their British and French counterparts.

Against this background, it appears unlikely that La Poste or Royal Mail will soon enter a liberalized German letter post market – even though this argument is constantly heard in political debates in Germany. In the medium term, both state-owned companies will be busy enhancing their competitiveness in their domestic letter post markets. [only a german version available]

Discussion Paper is available for download.

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