1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182 
TNT's leaving logistics
Page 20
If you've noticed an error in this article please click here to report it so we can fix it.
TNT aims to sell its logistics
arm — but who's in the market?
Dominic Perry reports.
The news that express transport specialist TNT, part of the Dutch postal groupTPG, is to sell off its logistics business hasn't exactly been trumpeted from the rooftops. In fact the announcement is tucked away in a news release talking about "initiatives to sharpen its strategic focus".
Even in the list of key announcements, the sell-off trails a line about a "refined strategy [that] focuses on networks". In fact, despite the much heralded sale of its French logistics arm-seen by most analysts as a means of getting the division back on the straight and narrow the sale has come as a surprise.
John Manners-Bell,chief analyst at Transport I nte I ligence, remarks: "I think it came as a shock to most people in the industry. I don't know anyone who was expecting them to sell it, unless it was part of the wider business" TNT's press release in which the sale is announced is oddly circumspect. It begins:"TNT announces a broad range of initiatives that will sharpen its strategic focus on its core competency of providing delivery services by managing transport networks like mail, express and freight management.
"Key resulting initiatives include exiting its logistics business and a Elbn share repurchase."
It also talks about the strengths of its Express divisions and praises the growth they have been able to generate. Although it doesn't ipecifically say so, it's clear that the Logistics division hasn't been enjoying the same degree of fortune or growth, hence TNT's decision to sell it off. In fact,TNT's statement is a masterclass in understatement.
In it TNT CEO Peter Bakker says: "While our logistics business is a strong operation with a talented group of employees and good customer relationships, it will no longer fit with our strategic focus going forward."
All very well, but eagle-eyed readers will have noticed a conspicuous absence of references to 'high levels of growth' or 'massive profits'. However, analyst Datamonitor has made a more searching analysis of the situation.
It notes that problems at the logistics subsidiaries in France and Italy have hit the division's 2005 Q3 earnings they fell from €39m to €13m adding: "European revenues continued to be hurt by contract losses."
Potential suitors
TNT has already sold its French logistics business to Norbert Dentressangl e and local managers; now the rest is up for grabs. The business itself is generally pretty robust the UK arm has a turnover of €750m and employs 7,500 people including its Newsfast business. However, the burning question remains who will buy it.
Datamonitor's express analyst Emilio Pedrinaci says:" It remains to be seen who will purchase the division, although the list of potential buyers cannot be that long.
"Exel was bought by Deutsche Post (DP) this year and it seems improbable that the EU would allow the German conglomerate to acquire another major logistics operator in Europe.
"Wincanton, another heavyweight in the logistics segment, might not have the financial resources to complete such a deal. UPS, which has recently expressed interest in expanding its European express and logistics business via acquisitions, appears to be in a better position, however."
Transport Intelligence's Manners-Bell is more dubious about potential buyers rushing in: -Although TNT is keeping its Express division that's the part that others would want not the logistics division as a stand alone business. If UPS was planning to make a big play in the sector it would have gone for Exel and made a rival bid to DR Exel was in a far better position than TNT.
"As for Fed-Ex," he adds, "it's already said that it doesn't want to get into contract logistics as margins are too low."
Sold country by country
Manner-Bell says it looks much more likely that the logistics division will be sold off piecemeal, country by country.
There are also joint ventures TNT has entered into that might put off potential buyers for the whole division; notably with Italian haulier Arcese on contract to Fiat.
"Another company coming in may think long and hard whether they want that degree of exposure to Fiat and the automotive sector generally." he concludes •