Deutsche Post DHL is looking at the possibility of spinning off its underperforming freight forwarding operation DHL Global Forwarding or making an outright sale, allowing the German group to focus on its post and express businesses, Reuters reports, citing “two people familiar with the matter”.
Deutsche Post may seek a partnership, create a joint venture, or sell either part or the complete DHL Global Forwarding operation, the sources said, adding that no decisions had yet been made.
“The unit has had massive margin problems of late, among others, due to IT (information technology) troubles, so it’s natural that Deutsche Post is mulling ways to turn it around”, one of the sources told Reuters.
One option reportedly being looked at is a potential sale to Japan Post, which has ambitions to expand abroad and last year bought Australian freight and logistics group Toll Holdings.
Contacted about the report by Lloyd’s Loading List.com, a Deutsche Post DHL spokesman said today: “We don’t comment on market speculation or rumours.”
Asked by Lloyd’s Loading List.com at a conference call last November about whether Global Forwarding, Freight continued to be an integral part of the Deutsche Post DHL business model and service offering, group CEO Frank Appel replied: “The clear answer is ‘yes’. We are the market leader in air freight by far and the second-largest company in ocean freight.”
Meanwhile, a permanent successor has yet to be found for Roger Crook as the former Global Forwarding CEO who resigned last April after the extent of the problems with the rollout of the business’s ‘New Forwarding Environment’ IT transformation were revealed.
Earlier this week, DHL confirmed that Appel continued to have interim CEO responsibility for the Global Forwarding division.
Last November, DHL announced that it had abandoned its New Forwarding Environment (NFE) IT modernisation programme and written off €345 million after concluding that NFE had been an expensive mistake for its Global Forwarding division. After suspending the programme in May and admitting that its Global Forwarding unit had become “overwhelmed by change” as a result of attempts to modernise the business in the last 15 months, DHL has completed its analysis of the IT modernisation programme and decided to abandon it, in favour of “a step-by-step replacement and upgrade of its IT set-up”.
Source: lloydsloadinglist.com
Image: flickr
