Deutsche Post DHL Group has entered into a landmark deal that will transfer its supply chain operations in China to S.F. Holding, the close logistics partner of e-commerce giant Alibaba, in what will become a co-branded organisation for the next decade.
The transaction involves the supply chain business in Mainland China, Hong Kong and Macau. DHL highlighted that the deal has no bearing on DPDHL Group’s business activities in international express, freight transport and e-commerce logistics solutions in China.
DPDHL Group will receive an upfront payment of CNY 5.5 billion (EUR 700 million) and a revenue-based partnership fee over the next ten years from S.F. Holding.
SF will have access to DPDHL Group’s supply chain services, management expertise, transportation and warehousing technology. The co-branded organisation will operate under the leadership of Yin Zou, the current CEO, Greater China of DHL Supply Chain, along with his existing management team.
DPDHL Group says this strategic partnership will allow it to continue participating in the fast-growing Chinese supply chain market, leveraging SF’s extensive domestic infrastructure, distribution network and broad base of local customers.
This will accelerate the expansion of the co-branded organisation’s customer base, the German company says. DPDHL Group is committed to enhancing the organisation’s product and services offering by providing the breadth of its global supply chain expertise, it adds.
“The joint capabilities of DPDHL Group and SF will create a unique platform to meet the need for a high quality end-to-end supply chain provider in China,” says Frank Appel, CEO Deutsche Post DHL Group.
“SF’s local market expertise in China has real advantages for our customers across all industries including technology, healthcare, retail, automotive and e-commerce. Combined with our global operations standards and network support, the agreement provides a solid foundation to continue exploring further opportunities in China in the coming years,” he adds.
Dick Wong, chairman, SF Holding adds: “SF has been actively expanding its business-to-business (B2B) capabilities and pursuing different strategic partnerships to grow SF into a truly integrated logistics solutions provider that delivers best-in-class services for our clients.
“This partnership agreement will strengthen our capability in providing supply chain services to a diverse realm of industries and allow us to bring world-class management expertise into our supply chain business operations, enabling us to further understand and tailor to our customer needs.
“This agreement will help us achieve our vision to grow further internationally, partnering with DPDHL Group, a world class organisation,” Wong adds.