Skip to main content
Select Source:

TNT Post Group N.V.

TNT Post Group N.V.

Post Office Box 1300
1100 KG Amsterdam
Netherlands
(20) 500 60 00
Fax: (20) 500 70 00
Web site: http://www.tntpost-group.com

Public Company
Incorporated: 1998
Employees: 100,666
Sales: NLG 15.2 billion (US $7.53 billion) (1997)
Stock Exchanges: Amsterdam New York London Frankfurt
Ticker Symbol: TP
SICs: 4212 Local Trucking Without Storage; 4215 Courier Services, Except by Air; 4225 General Warehousing & Storage; 4513 Air Courier Services; 4731 Arrangement of Transportation of Freight & Cargo

TNT Post Group N.V. (TPG) provides domestic and international mail services, express distribution, and logistic services. It includes the Dutch postal service, which is the first such service to be part of a publicly traded company, and is considered one of the most efficient postal operators in the world, delivering 22 million mail items every day. The companys mail division also offers domestic services such as direct marketing, direct mail, and unaddressed advertising, and the company provides international bulk mailing services. Under the TNT brand, the companys express services distribute documents, parcels, and freight internationally, constituting one of the four main players in the market (along with United Parcel Service, FedEx, and DHL). Logistics includes the management of a customers entire supply chain, encompassing transport, stock management, order picking, and information systems management. TPGs logistics sector specializes in specific industry segments, most notably medical supplies and automotive parts. TNT Post Group has branches in 55 countries and operates in more than 200 countries.

TNT Post Group is essentially a combination of the Dutch post office and Australia-based TNT Limited. Prior to the 1980s European post offices were typically included within state-owned post and telephone companies, known as PTTs. In the 1980s these companies began to be privatized, with the Netherlands PTT gaining its independence in 1989 and then emerging as a public company, Koninklijke PTT Nederland N.V. (KPN), in 1994. Two years later KPN acquired TNT. In June 1998 TNT Post Group was demerged from KPN, creating a new entity focused on mail, express, and logistics and leaving KPN purely a telecommunications firm.

Dutch Postal Services Early History

In the early 18th century cities were the main purveyors of postal services in The Netherlands, known at the time as the Dutch Republic of the United Provinces. Over time the cities acceded their roles as postmasters to the provinces, leading to the 1752 creation of the Statenpost, which held monopolies on domestic service and had improved relations with foreign postal services. The United Provinces were taken over by France in 1795 and transformed into the Batavian Republic, which was modeled on the revolutionary French republic. Thus in 1799 the Statenpost was reorganized into a single national service based on the French model.

Napoleon changed the Batavian Republic into the kingdom of Holland in 1806. The following year the Dutch postal service became part of the Ministry of Finance, with the first Postal Act setting up regulations on the collection, transport, and delivery of letters. Rates were made uniform across the entire nation, based on weights and distances. Required to make significant contributions to the Treasury, the postal service seemed to many Dutch citizens to be a tax-raising organization rather than a public service body. Meantime, after the fall of Napoleon, the kingdom of The Netherlands gained its independence in 1815 at the Congress of Vienna.

In the second half of the 19th century the Dutch postal service evolved into a more modern entity. The Postal Act of 1850 mandated that the postal service existed to serve the public interest. Postal tariffs were simplified, and the postage stamp made its debut in 1852. That same year, every municipality in The Netherlands acquired what were essentially post offices, places where letters were posted for delivery and collected. The Netherlands could boast of a well-run postal service by 1870. New services, including the postcard and parcel post, were soon added.

Automation and Restructuring in the 20th Century

The Great Depression had a profound effect on the postal service. Rates were reduced and efforts were made to cut costs. The first steps toward mechanization were taken, including the 1931 debut of the Marchand Transforma, which was the first sorting machine, capable of sorting mail into 400 destinations with the help of an operator feeding in the mail by hand. In another cost-cutting move, the number of daily deliveries was reduced from three to two. Despite this, increased efficiency enabled mail to be delivered faster, with items posted by 6:00 in the evening being delivered the following morning. A more commercially savvy postal service also launched a majorfor the eraadvertising campaign.

The postal service operated in the red following World War II. Once again, rates were raised and cost-cutting measures were undertaken, particularly attempts to control labor costs. In 1949 a national analysis of processing and delivery statistics led to the closure of some smaller post offices. Needing to become even more efficient, the postal service restructured operations in the 1960s and 1970s so that certain tasks were concentrated within larger units. Mail began to be processed at 18 (later reduced to 12) mail interchange centers, where highly efficient sorting and canceling machines were installed. In 1977 the postcode made its debut, allowing further automation, with mail now being sorted down to a postmans route rather than a city. Deliveries were reduced to one round per day during the 1970s. By the mid-1980s the postal service was profitable.

Privatized in 1989, Floated in 1994

The Netherlands PTT, which included both the Dutch postal service and the state-run telephone monopoly, gained its independence from government control in 1989 although it remained state owned. Netherlands PTT became a private company called PTT Nederland N.V., with PTT Post and PTT Telecom subsidiaries. PTT Postheaded by President Ad J. Scheepbouwernow had much greater latitude to seek out opportunities for growth at a time when traditional postal services were being rocked by the increasing popularity of telex, fax, and e-mail, in addition to the rapid ascendance of international express delivery services.

Privatization opened the door to PTT Post gaining in a short period a commanding portion of the remailing sector. Re-mailing involved taking in bulk consignments from foreign corporate clients and then wrapping, addressing, labeling, and shipping the mail to a specified list of customers in another country. Such services often provided cost savings to the clients, as well as delivery faster than that of the clients domestic postal service. In 1992 PTT Post launched an ambitious automation program, eventually dubbed Briefpost 2000, which aimed to increase the percentage of machine-sorted post from the 25 percent of 1990 to about 90 percent by 2000. The result would be not only reduced costs but also improved service quality.

Another keyand particularly boldpost-privatization move came in 1992 when PTT Post joined with the postal services of Sweden, France, Germany, and Canada to acquire 50 percent of GD Express Worldwide (GDEW). The other half-interest in GDEW remained with TNT Limited, which had created it. Operating under the trade name TNT Express Worldwide, GDEW combined the express mail and parcel activities of TNT and the five postal services. This marked the beginning of the increasingly close relationship between PTT Post and TNT.

In June 1994 The Netherlands state sold to the public 30 percent of its shares in PTT Nederland, which was renamed Koninklijke PTT Nederland N.V. (KPN). The NLG 6.8 billion (US $3.9 billion) raised marked the largest initial public offering in Dutch history. KPN obtained a listing on the Amsterdam Stock Exchange. The flotation was unusual in that most European PTTs were split into separate postal and telecom companies before being taken public. The decision not to do so indicated the strong position that PTT Post held, strong enough to stand alongside PTT Telecom in a publicly traded company. In late 1995 The Netherlands sold another 25 percent of KPN through a secondary offering, leaving the state without a controlling interest in the company. Shares began trading on the New York Stock Exchange for the first time, and then in 1996 listings were added in Frankfurt and London. It was also in 1996 that KPN acquired full control of both TNT and GDEW.

Company Perspectives:

TNT Post Groups mission is to achieve a recognized world leadership position in its three business areasmail, express, and logisticsbased on a strong market position in Europe.

TNTs Early History

TNT Limited began in 1946 when Ken W. Thomas started operating a one-man trucking business in Sydney, Australia. After several years of steady growth, he incorporated the business as a private company in 1951. Continuing growth over the next decade, with the expansion of the companys fleet and extension of its routes across Australia, led to its incorporation as a public company in 1962, under the name Thomas Nationwide Transport Limited (TNT), and listing on the Sydney Stock Exchange the following year. Access to public funds allowed the company to continue expanding until, as the end of the decade approached, the limits of the Australian trucking market became apparent and TNT began to look for opportunities to extend its business beyond Australia. The chance came in 1967, a key year in TNTs history, when the company merged with another growing Australian transport enterprise, the Alltrans Group. Like TNT, Alltrans was another company that began in a small way in the optimistic environment of postwar Australia. One of Alltranss two principal shareholders, Peter Abeles, was a refugee from war-torn Hungary. Abeles stepped off a ship in Sydney in the late 1940s with £4,000. With a partner, George Rockey, he bought two trucks on time payment, named them Samson and Delilah, and, like Thomas, set about building up his business. Abeles would spend weeks driving his car through the Australian bush, drumming up contracts for the fledgling business. Although the merger with TNT involved discarding the Alltrans name and Thomas remaining head of the merged group, Abeles soon emerged as the driving force in the company, its key strategist, and its public face.

The merger gave TNT its first international operations via Alltranss activities in New Zealand, which had begun in 1964. The size of the new group gave it the base required to begin expanding internationally. TNT began an ambitious international acquisition program, starting with its entry into the tough U.S. trucking industry through the purchase of a California truck line, Walkups Merchant Express Inc., in 1969. In 1970 TNT bought Gill Interprovincial Lines in Canada and acquired one-third of a shipping company, Bulkships. Over the next two years, the expansion continued with the purchase of another Canadian operator, Scott Transport, one-sixth of the Union Steamship Co. of New Zealand Ltd., and TNTs entry into the U.S. air transport business through a joint venture with Shulman Transport Enterprises Inc. In 1972 the company also opened a small office in the United Kingdom, its first European presence. These swift moves were not without problems, however. The U.S. trucking industry was a difficult market for a newcomer. TNTs efforts to move into this market were accompanied by a series of wildcat strikes, mysterious bombings, and arson attacks. The damage caused by this interference was the first in a number of problems that would affect TNTs U.S. operations for years.

The company continued with its acquisition plans, aimed at attaining Abeless vision of an integrated global transport operation. In 1973 TNT went into partnership with two West German companies to form an international ship brokering company, Montan TNT Pty Ltd. It also formed Kwikasair Ltd., an express delivery service between the United Kingdom and continental Europe. TNTs U.S. base also was expanded, through the purchase in the same year of Overland Western Ltd., a trucking company operating in Ontario and New York and Michigan, and of Acme Fast Freight Inc. The company also began developing a strong South American presence in 1973 when it bought 70 percent of the Brazilian transport group Pampa OTT and established Kwikasair Brazil.

Failed Takeover of Ansett in 1972

It was TNTs activities within Australia, however, that suddenly brought the company to international attention in 1972. TNT had continued to grow steadily since the 1967 merger, and it was well on its way to becoming the countrys dominant transport group. In 1972 the company tried to accelerate the process by launching a hostile takeover bid for Ansett Transport Industries Limited (Ansett), the operator of one of Australias two major domestic airlines. Protected from free competition by a government-endorsed airline duopoly, Ansett was a highly profitable company that would have secured TNTs position as Australias leading carrier. Ansetts chairman and founder, Sir Reginald Ansett, was a tough adversary. At the height of the battle he called on the Victorian state government, headed by his personal friend Sir Henry Bolte, for assistance. The government ruled that it was unacceptable for a company based in Victoria to be taken over by a company from New South Wales, and it stopped the takeover. TNT withdrew with 23 percent of Ansetts shares, but kept a close eye on Ansett.

The failed bid for Ansett did not stop TNTs international growth program, which continued through the mid-1970s with a series of acquisitions, particularly in the United Kingdom and Canada, that the company was using as launch pads for later growth in Europe and the United States, respectively. In 1975 Abeles foreshadowed the companys next international step when he launched an attack on international shipping conferences and the effect these cartels had on the global transport industry and trade prospects. The following year TNT directly challenged one of the most powerful of these cartels, the North Atlantic Freight Conference, comprising some of the worlds largest shipping companies, by operating a nonconference container shipping service, Trans Freight Lines, on the Atlantic run.

Ten years after the merger between TNT and Alltrans, TNT had become Australias major transport group, despite its failure to take over Ansett, and was a growing presence internationally. The groups annual revenue had increased tenfold from A $46 million in 1967 to A $462.7 million by 1977, while its after-tax profits had risen over the same period from A $956,000 to A $15.3 million. Such a swift expansion, however, had left the group exposed to a wide range of fluctuating markets and economies. TNT had bought heavily, was a relative newcomer in many of its markets, and was losing money from some of its operations in the difficult U.S. market. In 1977 to 1978, for the first time since its public incorporation in 1961, TNTs profits fell.

Gained 50 Percent of Ansett in 1979

The company responded with a recovery strategy aimed at rationalizing its international activities to cut out the weaker activities and build up other operations to the point where they were more prominent than the Australian operations. The program began in 1979 with the sale of the U.S. trucking company Acme Fast Freight, which had lost money every year since being acquired in 1973. The group also cut a loss-making stake in Nigerian Shipping Operations from 100 percent to 25 percent. By 1980, the company projected, more than half of its profits would for the first time be earned outside Australia. These projections were overshadowed later in 1979, when a new takeover battle for Ansett Transport Industries Limited began. With Sir Henry Bolte gone and a more liberalized corporate climate in Australia, two groups, Ampol Petroleum and Bell Resources, began buying Ansett shares heavily. TNT entered the battle, which also involved Rupert Murdochs The News Corporation Limited. Just as the latter emerged as the likely victor, it suddenly became clear that TNTs stake was large enough to prevent Murdochs company from taking control. The two companies agreed to share control of Ansett, with 50 percent each. Ansetts operations included a major Australian domestic airline, Ansett Australia, as well as freight services and tourist resort operations.

The cash flow provided by its share of Ansett gave TNT renewed strength to pursue its international expansion plans. The company changed its international focus to concentrate on the United Kingdom and Europe as its most important growth area. This focus became clear in October 1980 when, sponsored by the British merchant bank Hambros, TNT was listed on the London Stock Exchange, after removing itself from the Toronto and Vancouver exchanges earlier in the year. TNT was now well placed to expand into Europe, although it continued to look for openings in the United States, buying another trucking and warehousing company, Pilot Freight Carriers, while Trans Freight Lines doubled its size by buying another container line, Seatrain International.

The impact TNTs services were having in its new markets was indicated in 1982 in a confidential U.K. Post Office report that stated that a new TNT private parcel delivery service, Homefast, would pose a serious threat to the Royal Mail parcels network. TNT took a significant step toward building a European freight network in 1983 when it bought Skypak, IPEC Holdings Ltd.s international courier operations, which operated in 26 countries. Combined with TNTs existing courier networks, this gave the group bases in 49 countries and provided access to Middle and Far East markets. Four months after the Skypak acquisition, TNT bought IPEC Europe, the leader in the European international express freight market, complete with more than 60 purpose-built terminals and 600 radio-equipped vehicles.

With its Ansett stake and its growing international business, TNT itself became a prime candidate for takeover in the early 1980s. One of Australias most skilled takeover operators, Robert Holmes a Court, stalked TNT through 1981 and 1982 but was held off, although at one stage Ansett and another of TNTs associates, Mcllwraith McEachern Limited, were called upon to pay more than A $60 million for a strategic stake in TNT to protect it from predators.

The vulnerability of a widespread transport group to the cyclical movements of economies became clear again when the companys profits plunged by half in 1982 to 1983. A recession in Australia had severely cut freight volumes, while in other markets competition had forced TNT to reduce its rates and thus its profit margin. TNT continued to pour money into expansion, however, opening a steady stream of operations and services in the United Kingdom, where it was a pioneer in the area of overnight delivery service, as it had been in Australia, and constantly looking out for new acquisition or expansion opportunities in Europe. In view of its international emphasis, the company changed its name in 1985 from Thomas Nationwide Transport Limited to simply TNT Limited (TNT).

A key event for TNTs European operation occurred in 1986 and came in large part by virtue of the close relationship that had developed between Abeles and Rupert Murdoch since the Ansett takeover. When Murdoch planned to move his British national newspapers in London from Fleet Street to a new plant in Wapping, in the face of fierce resistance from the printing unions, he also anticipated problems from the unions at British Rail, which distributed all of his publications nationwide. Murdoch, therefore, worked closely with TNT, whose U.K. manager, Alan Jones, built up a fleet of trucks in the weeks leading up to the transfer to Wapping. The weekend before the move, Jones hired 550 drivers, and when Wapping began operating, TNTs trucks rolled through the gates and the picket lines. For TNT the effort paid off, as the company was awarded the contract to distribute all of Murdochs British papers, providing a massive boost to the companys U.K. operation. The plan also marked the end of British Rails dominance of the newspaper distribution market, as more publishers followed Murdochs lead and switched to road distribution.

Emerged as Leading Diversified Transport Group by 1987

In the late 1980s TNT emerged from a period that could have damaged a company with a different approach. Faced with a recession and exposed in a number of geographical areas, TNT under Abeles spent heavily on expansion and outlasted the problems. The company was particularly well positioned in the £500 million-a-year European express delivery market, which was growing at 50 percent a year. The emphasis on Europe was shown by the fact that the companys European turnover grew by an average of almost 50 percent a year from when the U.K. office was opened in 1972 to 1987. By 1987 TNT had become the worlds largest diversified transportation group, with operations in 105 countries. Abeles indicated that the company was moving into a new phase when he said in the Sunday Times, June 28, 1987, The growing pains of setting up and consolidating into a truly worldwide transportation group are coming to an end.

From its wider base, TNT began a new series of developments aimed at furthering its reach in its existing markets, particularly in Europe. In 1987 the company sold its last shares in the U.S. shipping company Trans Freight Lines, which had been unsuccessful in its attempt to penetrate the tight North Atlantic shipping business and had lost a net A $80 million since 1976. TNT also unloaded another big loss-making U.S. operation, the trucking business TNT Pilot, which had lost more than A $60 million since 1980. In 1987 TNT made one of its biggest investments when it negotiated a right of first refusal of five years production of British Aerospaces new BAe 146 Quiet Trader freight aircraft, worth an estimated total of about £1 billion, and used the first 18 planes to establish a trans-European air express freight network servicing 17 countries.

TNT also pushed toward the goal of running a new freight airline in Europe. In 1988 it merged its European express freight division with that of its biggest competitor, Scandinavian Airline Systems Air de Cologne, and bought a 75 percent stake in the leading Spanish domestic freight carrier, Unitransa. It also bought KLM Airlines parcel express business, XP, and linked its air freight business in Europe with its road operations, creating a formidable new network, TNT Express Europe. By mid-1989 the European operations accounted for 35 percent of TNTs total worldwide assets, double the proportion of just two years before. Abeless eyes were clearly fixed on the coming of the single European market in 1992, and his strategy of dominating the highly segmented European freight industry by offering a comprehensive range of services between and within all European countries appeared to be working.

The late 1980s also marked TNTs extension into Eastern Europe, just in time for the collapse of the Eastern Bloc in 1989 and 1990. The company formed a joint venture with the Hungarian airline Malev in 1988, created TNT Aeroflota joint venture with Russias Aeroflotin 1989, and started a joint venture with Yugoslavias airline JAT in 1990. As other countries in the region became liberalized, TNT moved toward similar operations throughout Eastern Europe. It also expanded in Southeast Asia, investing in joint ventures with the Philippine Aerospace Development Corporation to develop the Philippines as a regional hub.

Troubled Period Began in 1989

From late 1989, however, TNT encountered a series of serious problems. The problems began in August 1989 when Australias domestic airline pilots resigned en masse as part of a campaign to secure a 29.7 percent salary increase that was outside the governments six percent wages accord and centralized system. Accordingly, the pilots unions industrial awards were cancelled by the Industrial Relations Commission. The four airlines, namely Ansett Airlines, East-West Airlines, government-owned Australian Airlines, and IPEC Aviation, slowly rebuilt their airlines by employing pilots on individual contracts. This took several months and was completed by March 1990. The number of pilots reemployed was significantly lower than prior to the dispute. The dispute, which lasted for months, ended in favor of the airlines, but caused serious damage to the airlines revenue. At the height of the dispute, Ansett was estimated to be losing A $10 million a week. TNTs profits for the September quarter of 1989 were 70 percent lower than for the same period a year before.

The damage subsided after the dispute, but hopes for a return to profit growth disappeared in 1990, when Australia, the United Kingdom, and North America fell into recession. As usual, the economic downturn hit the transport industry hard, and TNTs broad exposure in these regions left it open to a severe drop in revenue. This problem was compounded in Australia in November 1990, when the federal government deregulated the domestic airline industry and ended the two-airline agreement that had protected Ansetts share of the air market for so long. Compass Airlines, a new company headed by a former Ansett employee, entered the market and began offering big fare reductions, forcing Ansett Australia, East-West Airlines, and Australian Airlines to introduce fare discounts of up to 61 percent, further slashing revenue.

These problemsalong with debt totaling A $2.2 billioncaused a surge of concern in financial markets about TNTs capacity to generate liquidity in tough times. In January 1991 the companys share price on the Australian Stock Exchange fell to a record low of A 75¢. Because of the unfavorable market conditions, the company decided not to issue A $200 million of preference shares, issuing later, in April 1991, 50 million new ordinary shares of A 50¢ at a premium of A $1.00 to ease its liquidity problems. The hardest blow came when TNT revealed that it had lost nearly A $197 million for the fiscal year ending in June 1991.

TNT Focused on Core Areas in the 1990s

TNTs board responded to this crisis with a reassessment of the companys growth strategy. The company simplified its structure by focusing on three core areas: international express delivery, domestic express delivery, and TNTs contract business with major manufacturers for the delivery of goods in certain sectors, such as automotive parts. Assets not fitting into these core areas became candidates for divestment. One of the first such selloffs came in March 1992 when TNT spun off its U.S. regional motor carriers into TNT Freightways (renamed USFreightways in February 1996). The initial public offering of 75 percent of the new companys stock raised US $280.3 million and left TNT with a 25 percent stake. Also in March 1992 TNT completed the acquisition of Chronoservice, a leading French express carrier, which filled a gap in the companys network of domestic express businesses in Europe. TNT reached an agreement with rival Federal Express whereby it would subcontract the delivery of inbound FedEx packages to ten European countries, a deal consummated that same month. Later in 1992 came the establishment of GD Express Worldwide (GDEW)which allowed TNT to remove A $600 million in long-term debt from its balance sheetand the start of the TNT-PTT Post relationship. An era also came to an end in 1992 when the colorful and autocratic Abeles stepped aside as managing director, replaced by the lower-key David Mortimer.

Abeles remained on the TNT board but only until September 1993 when he and four other directors resigned following a boardroom disagreement over how to handle the companys troubled balance sheet. Debt had been reduced to A $1.12 billion, but TNT posted losses of A $195.4 million for fiscal 1992 and A $256.7 million (US $171.1 million) for fiscal 1993. With A $400 million in debt due for repayment in both fiscal 1994 and 1995, the company was forced to step up its divestment program. In 1994 TNT sold the bulk of its shipping and development division for about A $125 million (US $89 million). Also divested was a car auctioning service in Australia. For fiscal 1994 TNT posted a profit of A $105.1 million (US $78 million), in large part because of a turnaround in Ansett Airlines and reduced losses at GDEW, which had been suffering the effects of aggressive competition.

KPN Acquired TNT in December 1996

In September 1996 TNT continued to narrow its interests when it sold its 50 percent interest in Ansett to Air New Zealand for A $475 million. Three months later Koninklijke PTT Neder-land (KPN) completed a friendly A $2 billion (US $1.58 billion) takeover of TNT, in one of the largest mergers in Dutch history. KPN also gained full control of GDEW as the other postal service partners in the venture sold out. The combination of PTT Post and TNT created the most extensive express mail network in Europe and one of the worlds four largest time-sensitive distribution and logistics groups (along with United Parcel Service, FedEx, and DHL). TNT activities related to mail, express, and logistics were integrated into PTT Post. Other TNT assetsincluding freight, shipping, and aircraft leasingwere soon sold off.

The combined PTT Post/TNT operations now generated about half of KPNs total revenue, compared with one-third before the acquisition of TNT. But on June 29, 1998, TNT Post Group N.V. (TPG)the mail, express, and logistics operations of KPNwere demerged from KPN and listed independently on the stock exchanges of Amsterdam, New York, London, and Frankfurt. KPN shareholders received one share of TPG stock for each KPN share they held. The Dutch government held a 44 percent stake in TPG at the outset. Given that the company included the national postal service of the countryan entity of vital importancethe government retained the special right to approve resolutions that would fundamentally alter the group structure of TPG and could increase its stake to a controlling 51 percent in certain circumstances only to safeguard the general interest. The government confirmed its intention not to reduce its stake below one-third before 2004. In addition, the government had the right to appoint three of the nine members of the TPG supervisory board. Ad J. Scheepbouwer was named chairman of the board of management.

The culmination of PTT Posts Briefpost 2000 initiative came in November 1998 with the opening of six new sorting centers, which replaced the 12 mail interchange centers that had been used to sort mail. The state-of-the-art sorting machines not only greatly increased the percentage of automatically sorted mail, but also led to cost savings from the elimination of 4,500 jobs. Most of the people who lost their jobs were transferred to other positions within TPG. In any event, the completion of Briefpost 2000 provided a solid beginning for the newly independent company, which appearedbased on its long history of innovation, daring, and forward-thinkingto be well positioned to thrive in the increasingly competitive environment of the early 21st century, when European postal services monopoly on letter delivery was expected to be removed.

Principal Operating Units

PTT Post (including Letters, Parcel Service, International & Consumer, Media Service, Document Handling, and Post Offices [50%]); TNT (including International Mail, TNT International Express, TNT South Europe [Italy/France/Spain], TNT Benelux, TNT United Kingdom, TNT Germany, TNT North America, and TNT Australia/Asia).

Further Reading

Brady, Diane, Delivery Giants Race to Provide Overnight Service to Asian Cities, Wall Street Journal, August 7, 1995, p. B6A.

Brown, Kevin, Takeover Drive Puts TNT on Road to Profit, Financial Times, March 25, 1992, p. 26.

Cramb, Gordon, Offer Values TPG at Fl 22bn, Financial Times, June 29, 1998, p. 28.

_____, TNT Post Group Tops Forecast at Halfway, Financial Times, September 1, 1998, p. 17.

Cramb, Gordon, and Nikki Tait,Wrapping Up the Old with the New, Financial Times, October 3, 1996, p. 28.

du Bois, Martin, KPN Grows To Challenge Delivery Giants, Wall Street Journal, December 17, 1996, p. A6.

Dutch Government Set To Divest Control of KPN, Privatisation International, October 1995, pp. 1 +.

Milbank, Dana, Dutch Service Hopes To Deliver Worlds Mail, Wall Street Journal, July 28, 1994, pp. Bl, B6.

Murdoch, Adrian, Postman Pat He Aint, CA Magazine (Scotland), August 1998, pp. 34 +.

Salomon, Alan, Delivering a Market Battle: Courier Wars Darken Skies Over Europe, Asia as FedEx, TNT, DHL Battle for Domination, Advertising Age, July 17, 1995, p. 1-18.

Tait, Nikki, TNT Losses Mount as Directors Quit, Financial Times, September 9, 1993, p. 34.

_____, TNT Sells Shipping Businesses, Financial Times, February 23, 1994, p. 31.

TNT Sale May Signal Industry Trend, Logistics Management, January 1997, p. 26.

van de Krol, Ronald, KPN Floats into Land of the Giants, Financial Times, July 21, 1993, p. 23.

Witcher, S. Karene, Sir Peters Reign Dismays TNT Critics, Wall Street Journal, August 28, 1991, p. A4.

Witcher, S. Karene, and Martin du Bois, Dutch Telecommunications Firm KPN Offers $1.58 Billion for Australias TNT, Wall Street Journal, October 3, 1996, p. A9.

Richard Brass

updated by David E. Salamie

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"TNT Post Group N.V.." International Directory of Company Histories. . Encyclopedia.com. 13 Dec. 2017 <http://www.encyclopedia.com>.

"TNT Post Group N.V.." International Directory of Company Histories. . Encyclopedia.com. (December 13, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/tnt-post-group-nv-0

"TNT Post Group N.V.." International Directory of Company Histories. . Retrieved December 13, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/tnt-post-group-nv-0

TNT Post Group N.V.

TNT Post Group N.V.

PO Box 13000
1100 KG Amsterdam
The Netherlands
(31) 20 500 60 00
Fax: (31) 20 500 70 00
Web site: http://www.tntpost-group.com

Public Company
Incorporated:
1752 as Statenpost
Employees: 101,582
Sales: NLG 16.33 billion (US$8.7 billion) (1998)
Stock Exchanges: Amsterdam Frankfurt London New York
Ticker Symbol: TPG
NAIC: 492210 Delivery Service; 491110 Postal Delivery Services

The Netherlands TNT Post Group N.V. (TPG) is helping to redefine postal services. The first publicly traded postal service in the world, TPG offers mail, express mail, and logistics services on a worldwide basis. The combination of the former Dutch postal service and the express mail and logistics activities of TNT Worldwide has created the worlds fourth largest mail services provider, behind Federal Express, UPS, and DHL, worth more than NLG 16 billion (nearly US$9 billion) in annual revenues. TPGs business activities include domestic mail services and direct mail services in The Netherlands; international mail and international express mail services, principally in Europe and Asia; and worldwide logistics operations with a focus on supply chain management. Formed from the breakup of the former Dutch postal and telecommunications monopoly, the PTT Nederland, TPGs shares joins sister company Royal KPNs shares on the Amsterdam, Frankfurt, London, and New York stock exchanges. The company is led by chairman and CEO AJ. Scheepbouwer.

Birth of a Postal System in the Mid-18th Century

The formation of The Netherlands post office system coincided with the evolution of that country from a collection of loosely federated cities into a single national entity. Prior to the mid-18th century, each of the various cities operated their own postal services. The federalization of the regionwhich at one time included much of Belgiuminto a more cohesive gathering of states under Stadhouder Willem III also encouraged the consolidation of the regions postal facilities. In the first half of the 18th century, ownership of postal services was transferred from a city level to a state level. In 1752 The Netherlands officially established a new postal service, called the Statenpost, which granted regional monopoly status to each of the state-run post offices.

The new entity placed the Dutch mail services on a more equal footing with the postal systems of other countries. It was not until the end of the 18th century that the Dutch postal services were reformed into a single, national system, modeling its organization after the system developed by the French. This system, officially established in 1799, provided the foundation of what would soon become known as the PTT Post.

The Dutch postal service inherited a variety of postal tariffs and collection and delivery methods. In 1807, however, the Post was placed under the administration of the Ministry of Finance. This body passed the countrys first Postal Act, a series of regulations providing for a more standardized collection, carrying, and delivery system, while also establishing a single rate systembased on distance and weightfor the entire country. Yet the Post still was not conceived of as a public service; instead, it was expected to operate more along the lines of a tax collection service, providing funds for the national treasury.

A shift in the vision of The Netherlands postal services came in the mid-19th century. The passage of the Postal Act of 1850 established the postal service as a service in the public interest. While remaining under the finance ministry, the Post shed its role as tax collector to become a public service. The Postal Act of 1850 further codified the postal services domestic monopoly and created a simplified postal rate structure.

Two years later, the Post marked its entry into the modern era of postal services delivery, when it issued its first postage stamp. That same year also saw the institution of a nationally organized network of postal service facilitiesnow, every town received its own post office and a system was established for the collection and delivery of letters. The postman quickly became a national fixture, delivering mail as much as three times a day. The postal service rapidly extended its network of post offices. New services, including delivery of postcards and packages, also were introduced. By the 1870s, the Posts network of post offices covered most of the country.

A new communication technology would soon join the postal service. By the mid-1850s, The Netherlands had begun to install its first telegraph transmission networks. In 1852, the country formally organized its telegraph utility, the Rijkstelegraaf, under the Ministry of the Interior, which assumed responsibility for installing a roadside network of telegraph poles and cables. Use of the telegraph as a communication means remained relatively limited, however.

The postal system and the telegraph service, which was soon to add the newly invented telephone, operated as separate government agencies until the 1880s. Given the limited growth of the telegraph in The Netherlands, it was decided that the two services should be joined into one agency, under a single ministry in 1886. With the addition of telephone services, this agency would become known as the PTT (for Post, Telegraph, and Telephone) and remain a state-run monopoly for more than 100 years.

Separation in the 1990s

The combination of postal services with the countrys telegraph and telephone systems was never wholeheartedly performed. Even though the two services were available through the same officesthe network of post offices created by the postal serviceoperations remained more or less separate, with each branch retaining its own personnel and culture. For the most part, the two services operated in parallel, each with its own personnel, budget, finances, and infrastructure.

The Depression era forced the PTT to modernize. Where mail previously had been sorted by hand, the government agency introduced mechanized systems, especially with the introduction of the Marchand Transorma, a machine capable of sorting mail to 400 different destinations, placed into service in 1931. A more efficient sorting system enabled the PTT to cut back on the number of its delivery roundsinstead of the three deliveries per day, PTT postmen now performed only two. This cutback produced still more economies, encouraging the PTT later to cut back the number of daily deliveries to one.

The economic climate presented another opportunity for the PTT, as the government allowed the agency to operate more and more as a commercial enterprise. Unlike other government agencies, which were provided for in the national budget, the PTT was given a more corporate status, enabling the company to make the necessary capital investments and take write-offs on its balance sheets, rather than to depend on government approval for each investment. The PTT also was given its own press and publicity departments, enabling the agency to compete for consumer attention. While most of Europes postal services and telephone companies remained under government control, the PTTs relative independence allowed it to present a more modern appearance to consumers, who were treated also with original postal stamp designs.

The Nazi takeover of The Netherlands during World War II interrupted the PTTs independent activities, as the German occupier seized control of the countrys communications systems as well. With the Liberation, the PTT was faced with rebuilding its telephone infrastructure. By the end of the 1940s, however, the agency was presenting heavy losses. In this way, the PTT was no different from most of its government-run counterparts in other countries.

The agency performed its first analysis of postal usage, identifying national traffic trends and postal processing rates. This analysis led to more cost-cutting steps, including the scaling back of the post office network, in which many of the smallest offices were closed and the number of daily deliveries was reduced, as a single daily delivery became standard. At the same time, the agency began raising its postage and telephone rates. Telephone services provided a means to maintain a positive balance sheet when the telephone quickly imposed itself as a mainstay in the postwar home. Yet the PTTs postal arm continued to represent a financial burden, in part because its personnel were considered civil servants and granted all of the benefits of this status.

By the late 1960s, the PTT was faced with the need for still more cost-cutting measures. The decision was made to reorganize operations, in particular, to consolidate sorting, culling, canceling, and other handling activities into larger-scale facilities. The process of concentration began in the 1960s and continued through the 1970s, with the opening of 18 mail interchange processing facilities. Advancements in automating, sorting, and handling systems enabled fewer processing centers to handle increasingly large volumes of mail. An important improvement in the PTTs mail system came with the introduction of the postal code (known as the zip code in the United States) in 1977. The four-digit, two-letter postal code system allowed automated equipment to sort mail down to the individual delivery round, whereas the previous system could only automate sorting to a city wide level. This improvement finally enabled the PTT to reduce its delivery schedule to a single delivery per day. The number of processing facilities could also be reduced, down to 12. The great volumes of mail being processed in these facilities enabled the PTT to operate at a profit.

Company Perspectives:

Mission: TPGs mission is to achieve a recognized world leadership position through excellent service to customers in its three business areas Mail, Express and Logistics based on a strong market position in Europe.

Innovation also was coming to the telephone industrysoon to become known as the telecommunications industry. The use of telex equipment and facsimile machines, joined later by electronic messaging systems and Internet-based voice and video communication technology, as well as portable telephone systems freed of dependence on a physical telephone wiring system, threatened a drastic transformation of traditional communication systems. While the telephony industry was facing a time of great change, the postal world also was changing: the arrival of dedicated express mail and other courier services, led by such U.S. companies as Federal Express and United Parcel Service and Australias TNT, presented new challenges to traditional postal services.

The era of government-run, monopoly services had reached the beginning of the end. Restructuring was quickly becoming a necessity, not only to enable the PTT to compete in a rapidly transforming marketplace, but also to give the consumer more optionsand potentially lower rates. During the 1980s, however, the PTT focused on expansion activities, buying up interests in domestic cable and television networks and moving toward international expansion of its telecommunications services. It was only in 1989 that the PTT was finally privatized.

In that year, the PTT was reorganized as a private business, PTT Nederland NV, under direction of CEO Wim Dik. In the new structure, the postal service, renamed PTT Post, joined its larger telecommunications industry sister company, PTT Telecom, as an independently operating subsidiary. Despite being no longer a government agency, the new PTT remained nonetheless wholly owned by the Dutch government. The change, however, allowed the company to pursue its own growth strategy into the 1990s, unhampered by the slower governmental decision-making process. Privatization also enabled the company to seek new international partners, some of which had balked at the prospect of pursuing projects with a government agency.

One such partnership was established in 1992, when PTT Post joined its time-sensitive mail and freight services with those of Australias private TNT and the government-owned post offices of Canada, France, Germany, and Sweden in the partnership GD Express Worldwide (GDEW). TNT, which, since its founding in 1946 had expanded to become one of the worlds top four express mail and freight delivery businesses, took on a 50 percent ownership of GDEW. Before long, PTT Post bought out GDEWs public post office partners, so that GDEW became a de facto joint venture with TNT.

Faced with the imperatives of the commercial business world, PTT Post, led by Ad Scheepbouwer, underwent a restructuring during the first half of the 1990s, reaching profitability as early as 1993. One important move PTT Post made was to franchise some 1,600 of its smaller post offices, while placing the others under a joint venture operation with the Postbank, a subsidiary of Internationale Nederlanden. The reorganization also led PTT Post to cut some 1,000 jobs. At the same time, the subsidiary began making its first expansion moves, buying up a number of small domestic and international courier and express mail delivery services. PTT Post also was making moves into a new area, that of logistics.

In 1994, PTT Nederland went to the stock market, as the Dutch government sold off some 30 percent of its shares on the Amsterdam stock exchange. The public listing of the post-telecommunications business marked the largest offering ever in The Netherlands and also was the worlds first public listing of a post office. Interest was high in the shares; nonetheless, most investor attention went to PTT Telecom, nearly twice as large as the NLG 5 billion-per-year PTT Post. Two years later, PTT Nederland offered another 25 percent of its shares, effectively ending the Dutch governments control of the countrys post and telecommunications services. At that time, PTT Nederland took listings on the New York, London, and Frankfurt stock exchanges as well.

The following year, PTT Post stepped out of the shadows of its larger sister company when it reached an agreement to acquire the struggling TNT for some NLG 2.7 billion. The purchase, which placed PTT Post roughly on the same revenue footing as PTT Telecom, set the stage for the next evolution of the former state-run monopoly. In 1998, PTT Nederland announced that it was splitting into two entirely independent, publicly listed companies: Royal KPN, which contained the companys telecommunications activities, and TNT Post Group (TPG), which took over the companys postal, logistics, and express mail services wing, including both companies shares of the GDEW partnership. Both KPN and TPG retained listings on the Amsterdam, New York, London, and Frankfurt stock exchanges.

Among the first activities of the newly independent TPG was to reorganize its operations into two distinct units, PTT Post and TNT Worldwide, while shedding the noncore activities inherited from the TNT acquisition. The company also concentrated on the expansion of its mail handling facilities, including the opening of a state-of-the-art sorting facility in Liege, Belgium, an international road hub and depot in Duiven, The Netherlands, and the opening of six new Netherlands-based sorting facilities replacing the 12 facilities that had been in existence since the early 1980s. While expanding its infrastructure, TPG also continued consolidating its international presence, acquiring Jet Services, an express service based in France and operating throughout most of Europe, and in 1999 acquiring Italys Tecnologistica, with logistics operations in Italy, France, and Germany.

TPG ended its first year as an independent company on the upswing. Not only had its operating revenues swelled to more than NLG 16 billion, with profits of more than NLG 820 million, but the companys PTT Post subsidiary received a new distinction, as it was granted the right to add the moniker Koninglijke (Royal) to its name. To commemorate the occasion, the Royal PTT Post issued a special postage stamp, marking its 200th anniversary. As one of the worlds largest postal and express mail services, with a steadily building position in international logistics, TPG had taken center stage in a rapidly changing postal industry.

Principal Operating Units

Koninglijke PTT Post; TNT Worldwide.

Further Reading

Dickey, Allan, Public Services at Private Prices, Eurobusiness, March 1994, p. 57.

Echikson, William, Privatization: Posts with the Most, Business Week, August 17, 1998, p. 18.

_____, This Postal Service Plans to Put Its Stamp on the World, Business Week, April 27, 1997, p. 19.

Hastings, Phillip, Rush to Repackage, Financial Times, June 17, 1999.

Hitting the Mail on the Head, The Economist, April 30, 1994, p. 69.

Resener, Madeleine, How the Dutch Did It, Institutional Investor. April 1995, p. 66.

TNT Sale May Signal Industry Trend, Logistics Management, January 1997, p. 26.

Woodford, Julian, KPN, Utility Week, January 23, 1998, p. 24.

M. L. Cohen

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"TNT Post Group N.V.." International Directory of Company Histories. . Encyclopedia.com. 13 Dec. 2017 <http://www.encyclopedia.com>.

"TNT Post Group N.V.." International Directory of Company Histories. . Encyclopedia.com. (December 13, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/tnt-post-group-nv

"TNT Post Group N.V.." International Directory of Company Histories. . Retrieved December 13, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/tnt-post-group-nv