Deutsche Post AG - Company Strategy & Performance Analysis
Deutsche Post AG (DPDHL) provides postal and logistics services. It operates primarily through two brands: DHL and Deutsche Post, providing comprehensive services in postal, international express, air and ocean freight, road and rail transportation, and contract logistics. Key services offered by the company include national and international mail and parcel services, dialogue marketing services, outsourcing and system solutions for the mail business, international express, air freight, ocean freight, European road freight, and contract logistics.
The company operates its business through four reportable business segments, namely post, e-commerce and parcel (PeP); express division; global forwarding and freight; and supply chain. Deutsche Post is based in Bonn, Germany.
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Revenue growth of the PeP segment is driven by growing demand for e-commerce and parcel services
Revenue for the PeP segment increased from US$17,908.5m in 2015 to US$18,569.8m in 2016 owing to the rise in the prices of the Standardbreif and Maxibreif services under the post division. Further, rising demand for e-commerce, combined with increased business for cross border parcels in Europe and Asia, supported this growth. The post division accounted for a majority share of PeP’s revenue with 58.0% in 2016, whilst the parcel division accounted for 34.0%. Although e-commerce only held a minor share of 8.0%, it increased at rate of 12.5% over 2015-2016.
Strong growth of TDI drives revenue of the express segment
The express division of the company witnessed steady growth in terms of revenue, increasing at rate of 2.3%, from US$15,166.3m in 2015 US$15,510.7m in 2016, largely due to the strong adoption of TDI services in the Americas, Asia-Pacific, Europe and the Middle East. Business expansion via the establishment of logistic hubs in the US, Saudi Arabia, Uganda, and Germany also supported this growth. Europe accounted for the largest share of the express division with 41.0%, followed by Asia-Pacific with 34.0%, and the Americas with 18.0% in 2016. The Middle East and Africa accounted for the smallest share with 7.0%.
Global forwarding and freight revenue declined in 2016
Revenue of the global forwarding and freight segment declined at rate of 8.1%, from US$16,530.7m in 2015 to US$15,186.8m in 2016 owing to the negative impacts of currency fluctuations, decline in air and ocean freight rates and reduced fuel surcharges. In terms of global forwarding, revenue declined from US$12,020.0m in 2015 to US$10,641.9m 2016. Contrastingly, total freight revenue marginally increased from US$4,705.0m in 2015 to US$4,725.1m in 2016 owing to the rise in volume and business for ocean freight.