DHL spins out e-commerce from PeP division

Deutsche Post-DHL Group (DP-DHL) is addressing the ongoing woes in its Post-eCommerce-Parcel (PeP) division with a “divide and conquer” strategy, under which PeP will be separated into German and international divisions focusing on post and parcel and e-commerce, respectively. The changes are effective as of Jan. 1, 2019.

As part of the new organizational structure, PeP will be renamed Post & Paket Deutschland and will focus on the Group’s post and parcel business in Germany. Concurrently, a new, separate e-commerce division named DHL eCommerce Solutions will combine the e-commerce segments of PeP and the Group’s international parcel business, DHL Parcel Europe.

DP-DHL recorded a year-over-year decline in second-quarter EBIT of 58.5 percent for the PeP division and has struggled with declining volumes in traditional mail within Germany over several recent quarters. Realigning PeP to focus solely on the German post and parcel business is part of the Group’s strategy to turn around performance in the division.

“This plan includes improved yield management, indirect cost reduction and productivity improvement measures,” DP-DHL said. “At the same time, by creating the DHL eCommerce Solutions division, the Group will be better positioned to leverage opportunities within the booming e-commerce logistics sector in Europe and around the world.”