K&N CHAIRMAN ACCUSES “UNSOUND” EXPANSION OF EUROPE’S POSTAL COMPANIES INTO LOGISTICS

K&N CHAIRMAN ACCUSES “UNSOUND” EXPANSION OF EUROPE’S POSTAL COMPANIES INTO LOGISTICS

K&N CHAIRMAN ACCUSES “UNSOUND” EXPANSION OF EUROPE’S POSTAL COMPANIES INTO LOGISTICS

   Klaus-Michael Kuehne, the executive chairman of Kuehne & Nagel, said that the recent expansion of European state-owned postal service operators into the forwarding and logistics industries is an “unsound” competition development.
   Although European post office administrations are being privatized, they have been given a chance to “force their way into the purely free-enterprise-oriented forwarding and logistics industry” with money earned from public monopolies, Kuehne told the Forum Logistica conference in Helsinki, Finland.
   “Regrettably, this unsound development, which adversely affects free competition, is not being identified and counteracted rapidly enough by the appropriate European Union authorities,” he added.
   Kuehne cited the large takeovers of express, transport and logistics firms made by Deutsche Post, the German postal service group, and by the Netherland’s TPG postal company.
   Deutsche Post used “its letter monopoly to cover its losses in the transport sector while financing acquisitions in the freight industry,” Kuehne alleged. Deusche Post “went on a shopping tour unique in our industry, investing more than 10 billion Deutschmarks ($5.2 billion),” he added.
   “The extraordinary pace of the realization of the German post’s expansion program has been caused by the time window before liberalization of the letter business and its privatization, due this year,” Kuehne added.
   Last year, the European Commission announced the commencement of proceedings concerning possible state subsidies to Deusche Post, following complaints made by private-sector competitors about the use of Deutsche Post’s revenues in financing takeovers.