Last month the German, central and eastern European markets were the focus of attention for three of Europe’s largest logistics companies. TNT Logistics announced that it had hired three of the top executives from Luxembourgbased Thiel Logistik, including its founder and former CEO, Gunter Thiel. TNT has recognised for some time that it needed to build its operations throughout this region and these appointments mean that it has established a readymade management team that has a track record of rapid growth. The new management of Thiel, meanwhile, issued a profit warning blaming these same ex-employees for over ambitious forecasts.
Exel adopted a different approach to expansion in the region. It concluded a deal with leading German freight company Militzer & Muench (M&M) which will give it access to these key markets through a strategic alliance. M&M has extensive resources throughout the region which should allow Exel to build its logistics operations in an area of Europe it has been relatively weak.
However whilst these two companies were expanding, Christian Salvesen announced that it was selling its German subsidiary, Wohlfarth, to its managing director after years of loss making. Salvesen also received an unsolicited approach from an unnamed bidder with a view to acquiring the whole group. However talks broke down at an early stage.
In southern Europe, up and coming French logistics company, Norbert Dentressangle, increased its presence in the Italian market through the acquisition of Cidem, a company specialising in consumer goods logistics. This added another 90,000 sq m of warehousing to the French company’s Italian operations and reinforced its position as one of the fastest growing logistics companies in Europe. Also in Italy, TNT Logistics announced a major new contract with troubled automotive manufacturer, Fiat. A joint venture with Italian partner, Arvil, will see it take responsibility for Fiat’s complete inbound supply chain resulting in revenues of €250m a year.
A number of companies released their first quarter 2003 results. The performance of the logistics divisions of TNT and Kuehne & Nagel were both disappointing as margins fell significantly compared with the same quarter in 2002. Whilst TNT’s logistics problems were driven by its acquisitions in France, Germany and Italy, Kuehne & Nagel’s were caused by its struggling US acquisition, USCO.