Both logistics giants have bundled their contract logistics activities in the Chinese market, including Macao and Hong Kong. Responsible for all operational matters is newly founded ‘SF DHL Supply Chain China,’ based in Shanghai. The contract cementing the partnership was inked today (18 Feb.) and runs for ten years.
This Monday started with a great bang produced by DP-DHL and SF Holding heard worldwide by the logistics industry. It could become a game changer and put competitors under severe pressure.
According to the agreement, DP-DHL will transfer all their supply chain activities in China, Hong Kong and Macao to Shanghai-based SF Holding, one of the leading logistics providers in the Chinese market.
“This applies exclusively for warehousing, storekeeping activities, the processing and packaging of goods and related fulfillment services,” explained DP-DHL Supply Chain speaker Daniel Pohl to CargoForwarder Global.
Mr Pohl added to this that other DHL Group members such as Express, Global Forwarding or Freight are exempt from the deal.
Fully responsible for managing the contract logistics and forthcoming business activities is ‘SF DHL Supply Chain China,’ the newly founded company led by Yin Zou, former CEO DHL Supply Chain for Greater China.
Concerning the financial part of the deal, DP-DHL states in a press release that they received RMB 5.5 billion (~ EUR 700 million) for putting their signature on the dotted line. On top of this, they will get revenue-based partnership fees for 10 years.
From their side, they will provide the co-branded business with “trademark license, customer referral, employee training, best practice sharing and other areas of support,” states their release.
Conversely, ‘SF DHL Supply Chain China’ will have access to DP-DHL Group’s global expertise, network, operations standards and innovations, across industries from technology, healthcare, retail and automotive to e-commerce.
“Creating a unique platform,” Frank Appel
Frank Appel, CEO Deutsche Post DHL Group commented: “This supply chain alliance with SF is a strategic milestone for DP-DHL Group. With our joint capabilities we will create a unique platform to meet the need for a high-quality end-to-end supply chain provider in China” He went on to say that the agreement combines SF Holding’s local market expertise and his Group’s global operation standards that open up doors for exploring further opportunities in China in the years ahead. “The agreement, therefore, is the cornerstone for DP-DHL Group to gain unprecedented access to China’s immense domestic market,” Mr Appel concluded.
The deal might transform the supply chain industry in China
This was underscored by Dick Wong, Chairman, SF Holding, who stated: “We are expanding our domestic footprint through SF DHL Supply Chain China to cater to our customers across a multitude of industries. This deal with DPDHL Group, a world-class organization, also helps us to better serve multi-national clients.”
Yin Zou, CEO, SF DHL Supply Chain China added to this: “This landmark deal gives ‘SF DHL Supply Chain China’ unparalleled advantage to transform the supply chain industry in China. My team and I are looking forward to amalgamating the best of what DP-DHL Group and SF stand for and converting these into tangible value for existing and new customers.”