NZ Post ends courier joint-venture with DHL
"Freightways management will be sleeping well with this move by their competitor."Featured comment
BUSINESSDESK: New Zealand Post is ending its joint-venture courier arrangements with DHL after eight years by buying its partner out.
It will buy DHL's 50% share of their joint-ventures Express Couriers in New Zealand and Parcel Direct Group, which owns Couriers Please in Australia, for an undisclosed sum.
Express Couriers operates the CourierPost, Pace, Contract Logistics and Roadstar brands.
The partners will continue to have a contract relationship, DHL providing international express delivery for NZ Post and NZ Post providing such services to DHL in the New Zealand and Australian markets.
“Express delivery is a core element of our current and future strategy,” NZ Post chief executive Brian Roche says.
“We continue to observe a dramatic decline in the amount of letter mail in our traditional postal network while at the same time parcel and courier volumes are growing steadily on the back of growth in e-tailing and e-trading.
“Having full alignment between NZ Post and Express Couriers will allow us to better match our product offerings to customers' needs and, as we have previously indicated, explore the benefits of further aligning our postal and courier networks.
"We can only achieve this if we have full ownership of Express Couriers,” he says.
When the joint venture was formed in 2004, then NZ Post chief executive John Allen said: “The decision to enter into a joint venture with DHL has been driven by a number of factors, including DHL's strong presence in South East Asia, China, Japan and rapid growth in India, which are all important markets to New Zealand's future.”
DHL had promised the joint venture would mean New Zealanders “will receive a more complete service”.
Now, DHL senior vice-president for Oceania, Gary Edstein, says: “Together we've created a business that has strong brand awareness and solid operational processes and no longer requires a joint ownership to ensure its success.”
His company “is excited about the opportunity to focus on our core business: international time definite delivery”.
The courier business operates as one part of the duopoly dominating the New Zealand market, competing against NZX-listed Freightways.
NZ Post has $200 million of subordinated notes listed on NZX which have a 7.5% coupon. They last traded at $103.723 per $100 face value, or 6.2%.