It might be expected that Dave Kulik, the Group Managing Director of TNT Logistics, would be a little cautious or even anxious about the future of his about-to-be sold business, but in fact the American is optimistic to the point of bullishness on the prospects of the new company he will shortly head.

Even the reasons he gives for the sale of the company are upbeat. Although TNT Group had faced pressure from activist shareholders on the strategic direction of the Group, Kulik asserts that the reason for TNT Logistics sale was its different customer profile: ” Logistics did not have the same kind of attributes as Express and Mail?.the customers are different, the customer of TNT Mail is the population of the Netherlands, Express has half a million customers, Logistics has 800 customers?there was a great deal of similarity between Express and Mail and virtually none with logistics”

Kulik is also sanguine on the impact of the sale on the new company’s strategy. He regards TNT Logistics as “highly focussed on six strategic services and six vertical sectors” and will not be affected by its exit from the rest of the group. It has agreed to continue to buy services from TNT Group at the same price levels and he regards it as “business as usual”. This is not an indefinite state of affairs but it appears that TNT Logistics will continue to have a close relationship with its former parent for the foreseeable future.

Similarly Kulik does not expect a great deal of change in the markets he serves. Automotive will continue to be the biggest sector for TNT Logistics, but other sectors, notably FMCG will grow faster. The recovery of FIAT has been vital to TNT Logistics and the LLP contract TNT Logistics has with the Italian auto manufacturer will continue to have a major impact on the company’s profits. Despite this Kulik comments that, “whilst the FIAT relationship is a very valuable relationship our business is broadening outside of automotive”.

Kulik also observes that the geography of the business will not change either, with FMCG growing particularly strong in North America and Europe.

But not all things will stay the same. What Kulik has to say about future expansion is particularly interesting. Whilst many might regard private equity as a form of strategic ‘deep-freeze’, Kulik asserts the opposite: “Just because we have been purchased by private equity does not mean that we are not looking at other acquisition alternatives?we took a hiatus from acquisitions, but from ‘06 we were ready to start the investigation of other acquisitions” He continues that ” we have a pipeline of acquisition targets that we will pass-along to Apollo and they will do the assessment whether we should acquire any companies”

In describing what these acquisitions might be he comments that TNT does not have any major geographic weak areas rather “I think you find our potential acquisitions will be based upon complementary logistics services, where our retail, industrial or our consumer business is expanding. We might enter an acquisition that enhances our distribution capabilities or our return logistics capabilities.”

Tellingly he does not rule out movement in the area of freight forwarding to compensate for the loss of Wilson: “In 2004 I was the board sponsor that made the Wilson acquisition. We made the decision to move freight management over to Express as it was a network kind of business and it met the definition of what TNT wants to do in the future in terms of a network strategy. However what we lost in that translation was the fact that the Wilson acquisition gave the logistics division a more integrated sale” He continues that TNT Logistics will need some form of forwarding capability: “You can collaborate with a freight forwarder or you can purchase, but I don’t think you would be incorrect to say that it would be something we would look at in the future”

That only leaves the question of the name. Dave Kulik is discussing it at present but doesn’t know what it will be. But he plans to have the new brand in-place by the time the sale is finalised by the end of the year.

Source: Transport Intelligence

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