Deutsche Post Cozies Up to Amazon, as Retailer Looks to Launch Deliveries

Amazon prime air

Deutsche Post, Germany’s largest logistics company, has stressed its cooperation with online retailer Amazon – despite the latter’s plans to launch a standalone delivery service in the country.

Spokesperson Danja Kuhlmann told Red Herring yesterday that the German firm will “continue to work together” with Seattle-headquartered Amazon, adding that Deutsche Post’s services will be required by the U.S. firm for some time to come.

Cooperation, however, seems far from Amazon’s top priorities this summer. It has already tested the Teutonic water with a 240-van foray in the southern city of Munich, where local post office staff have reported a 25 to 30% drop in the number of packages delivered by Deutsche Post’s DHL service. Amazon parcels account for 30% of DHL’s German deliveries.

Amazon is holding talks with Frankfurt-Hahn Airport, outside Germany’s financial capital, that is losing money, according to the Süddeutsche Zeitung. German bloggers have noted that this could be a major step in the retailer’s plans to launch a fleet of delivery planes. The firm has already penned a deal to lease 20 Boeing 767 freight aircraft to fulfill fast delivery orders in the US.

It is one of a raft of moves that experts have speculated shows Amazon’s ambitious logistics goals. The Seattle-headquartered giant called itself a ‘transportation service provider’ in its annual report last year; registering Amazon China as an ocean freight forwarder; and buying thousands of Amazon-branded delivery trucks. The company did not respond to requests for comment on this article.

“We have already underlined in the past that Amazon is one very good customer in an overall strongly growing market,” Kuhlmann said. “We have a close relationship with them and continue to work together with them to support them in their growth path by providing the best possible service and customer satisfaction.”

“Although they will most probably continue in their expansionary plans regarding last-mile delivery in Germany we believe that they will continue to require our services in the future in order to further support their growth,” she added. “Furthermore we can rely on a very broad customer base and see continuous growth across all sectors.”

Nationwide, Deutsche Post DHL’s parcel delivery market share is a reported 44%. It is one of Germany’s largest employers with 497,745 staff members. It is also the country’s 13-biggest company, with a 2015 revenue of €59.2 billion ($67.6 billion). Deutsche Post will reveal its interim reports on May 11, at a time when questions will be asked repeatedly about Amazon’s shuffles into its space.

Jurgen Gerdes, Deutsche Post’s head of parcel delivery, was quick to play down future competition in a recent interview with German business daily Handelsblatt. “Other large postal services have de facto stated that ‘whoever turns their back on us is our enemy,’” he said. “We for sure wouldn’t do such a thing, because that doesn’t help anyone.”

That may be wishful thinking. Bonn-based DHL may have pipped Amazon to the drone post with its September, 2014-launched service to the North Sea island of Juist. That followed Amazon’s much-derided Amazon Prime Air announcement on U.S. TV show 60 Minutes.

But in all other metrics Amazon, with revenues of $107 billion last year, could severely dent Deutsche Post’s business – and soon. And it’s not the only tech upstart taking aim at Europe’s logistics giants. Uber’s courier service UberRUSH is already operating in New York City, and plans are said to be underway for a European rollout soon. That will make grim reading for those in the offices of not only Deutsche Post but the U.K.’s Royal Mail, La Poste in France and PostNL, the national service of the Netherlands.