Logistics Zone In On Eastern Europe

     Shortly before Christmas, DHL treated itself to a nice gift under the Christmas tree with its acquisition of the leading Czech express service PPL CZ s.r.o. Shortly after the transaction was made public, competitor TNT followed suit and acquired the overnight provider ISH Nocni Express, which has operations in the Czech Republic and Slovakia.
     These are just two examples that demonstrate growing interest in the Eastern European market on the part of the dynamic fast-moving logistics industry.
     With promising economic conditions, the Eastern European market is increasingly attracting the attention of logistics companies – a trend that is allowing the submarkets in the Czech Republic, Hungary or Slovakia to grow significantly faster that the saturated markets of the Western European countries.
     Growth rate is between 4 and 12 percent per annum, as exemplified by the 2004 gross domestic product figures for the Czech Republic (+4.4%) and Ukraine (+10.8%).
     Multi-national investors are driving growth in automobile manufacturing, chemicals, electronics and mechanical engineering by funding heavily in this region as a production site for their respective industries.
     In addition, many midsize enterprises and suppliers are following the lead of the larger companies and establishing a presence in the region due to the lower wages and lower tax rates (as compared to Western Europe).
     All of this has the effect of integrating the national economies between the Baltic States and the Balkans more and more into the international labor network of the global economy.
     For international air cargo companies and logistics companies, this opens up a large new sphere of activity.
     As example Deutsche Post subsidiary DHL was quick to recognize this opportunity and established an early position in the region with its network of branch offices, trucking connections and numerous express flights.
     The various components of this network come together in the global IT Service Center opened in Prague on September 24, 2004, which currently employs approximately 900 IT/computer and software specialists.
     The Service Center is one of three DHL IT centers worldwide – along with Scottsdale, Arizona and Cyberjaya/Kuala Lumpur in Malaysia – that manage the worldwide flow of information, from shipment tracking to financial transactions to warehouse management.
     At the dedication ceremony for the IT Service Center in Prague, Deutsche Post Chairman Klaus Zumwinkel explained the decision to locate the operations center in the Czech Republic and why Prague was given precedence over competing locations in Western Europe.
     He described the Prague region as “a dynamic economic region with highly qualified workers.”
     As early as the mid-1990’s Deutsche Post subsidiary Danzas acquired the small Polish transport company Servisco.
     Today the business unit known as DHL Danzas Air & Ocean, which will operate under the new name DHL Global Forwarding as of April 1, 2006, has seven branch locations in the country according to Country Director Piotr Iwaniuk.
     With its 10 percent share of the airfreight market, DHL’s Poland operations rank number one on the list of the air cargo agents there.
     The forwarding agent also is in front in the neighboring Czech Republic with a 15 percent share of the air cargo market.
Heiner Siegmund