TPG N.V. History
1100 KG Amsterdam
Telephone: (31) 20 500 6000
Fax: (31) 20 500 7000
Incorporated: 1752 as Statenpost
Sales: EUR 11.8 billion ($14.9 billion) (2003)
Stock Exchanges: Amsterdam Frankfurt London New York
Ticker Symbol: TPG
NAIC: 492210 Delivery Service; 491110 Postal Delivery Services
Our mission is to exceed customers' expectations in the transfer of their goods and documents around the world. Our mission is to deliver value to our customers by providing the most reliable and efficient solutions in distribution and logistics. Our mission is to lead the industry by instilling pride among our people, creating value for our shareholders, and sharing responsibility for the world in which we live.
- The Netherlands officially establishes a new postal service called the Statenpost.
- Dutch postal services are reformed into a single, national system.
- The postal service is placed under the administration of the Ministry of Finance.
- The Postal Act is passed.
- Postal system and telegraph and telephone services are brought together under a single ministry to form the PTT.
- Use of postal codes begins.
- PTT is privatized; the postal service is renamed PTT Post.
- PTT Nederland goes public.
- PTT Post acquires TNT.
- PTT Nederland splits into two independent companies--Royal KPN and TNT Post Group.
- The company changes its name to TPG N.V.
The Netherlands' TPG N.V., formerly known as TNT Post Group, operates as the world's first publicly traded postal system. The company has three main divisions--mail, express, and logistics--and provides a wide range of collection, storage, sorting, transport, and distribution services. Its postal arm, Royal TPG Post, oversees mail networks in nine European countries. TNT Express covers 32 countries while TNT Logistics manages contracts in 36 countries with over 500 warehouses. TPG was formed in 1998 by the breakup of the former Dutch postal and telecommunications monopoly, PTT Nederland.
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 its own postal services. The federalization of the region--which at one time included much of Belgium--into a more cohesive gathering of states under Stadhouder Willem III also encouraged the consolidation of the region's 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 country's first Postal Act, a series of regulations providing for a more standardized collection, carrying, and delivery system, while also establishing a single rate system--based on distance and weight--for the entire country. Yet the Post was still 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 delivery 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 service's 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 facilities--now, 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 many as three times a day. The postal service rapidly extended its network of post offices. New services, including delivery of postcards and packages, were introduced. By the 1870s, the Post's 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.
Transition and Modernization: 1890s-1950s
The combination of postal services with the country's telegraph and telephone systems was never wholeheartedly performed. Even though the two services were available through the same offices--the network of post offices created by the postal service--operations remained more or less separate, with each branch retaining its own personnel, budget, finances, and infrastructure.
The worldwide depression of the 1930s forced the PTT to modernize. Where mail previously had been sorted by hand, the government agency introduced mechanized systems, notably 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 rounds--instead 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 was also given its own press and publicity departments, enabling the agency to compete for consumer attention. While most of Europe's postal services and telephone companies remained under government control, the PTT's relative independence allowed it to present a more modern appearance to consumers, who were treated with original postal stamp designs.
The Nazi takeover of the Netherlands during World War II interrupted the PTT's independent activities, as the German occupier seized control of the country's communications systems. With the Allied 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 PTT's 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.
Restructuring Leads to Privatization: 1960s-80s
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 process increasingly larger volumes of mail. An important improvement in the PTT's 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 citywide 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.
Innovation also was coming to the telephone industry--soon 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 was changing as well: the arrival of dedicated express mail and other courier services, led by such U.S. companies as Federal Express and United Parcel Service and Australia's 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 options--and 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. In 1989, 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.
Changes in the 1990s
One such partnership was established in 1992, when PTT Post joined its time-sensitive mail and freight services with those of Australia's 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 world's top four express mail and freight delivery businesses, took on a 50 percent ownership of GDEW. Before long, PTT Post bought out GDEW's 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 was the world's 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 government's control of the country's post and telecommunications services. At that time, PTT Nederland was listed on the New York, London, and Frankfurt stock exchanges.
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 company's telecommunications activities, and TNT Post Group (TPG), which took over the company's postal, logistics, and express mail services wing, including each 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, 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 Italy's 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 company's 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 to mark its 200th anniversary. As one of the world's 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.
TPG in the 21st Century
During the early years of the new century, TPG continued look for ways to expand its business. In 2000, the company struck a deal with CSX Corporation to acquire its logistics arm, CTI LOGISTX. The purchase--its largest since gaining independence in 1998--secured TPG's position as the third-largest logistics company in the world.
TPG's appetite for growth was evident in 2001 as the company added CD Marketing Services, Advance Logistics Services, and Lason Inc.'s U.K. division to its arsenal. In 2002, it strengthened its foothold in the Nordic logistics industry when it purchased a 50 percent interest in DFDS Transport Logistics. TPG expanded its German holdings the following year when it bought Werbeagentur Fischer GmbH, an unaddressed mail distribution company.
By now, TPG had its eye on several areas it believed would bolster future growth. The United Kingdom, whose postal market began deregulating in 2003, was one of those areas. In early 2004, TPG partnered with Royal Mail, giving it access to 27 million households in the United Kingdom. With the fastest-growing economy in the world, China also stood as a key growth target for TPG. The firm's joint venture with Shanghai Automotive Industry Corporation, ANJI-TNT, operated as the country's largest logistics provider. In 2003, ANJI-TNT signed China's largest automotive inbound logistics contract with Shanghai Volkswagen. TPG also signed a Memorandum of Understanding with The State Post Bureau of China, which laid the groundwork for future partnerships in mail, express, and logistics services.
The company officially adopted TPG N.V. as its corporate moniker in August 2001. In May 2002, Royal PTT Post changed its name to Royal TPG Post. The company enjoyed continued success as sales and net income rose each year from 2000 to 2002. However, net income fell by 50 percent in 2003, due in part to integration and operational problems at its Logistics division. Despite the drop in income, TPG's management team--lead by CEO Peter Bakker--remained optimistic about the company's overall future, fully confident that TPG would remain a key player in the postal, express, and logistics industries in the years to come.
Principal Operating Units: Royal TPG Post; TNT Express; TNT Logistics.
Principal Competitors: Deutsche Post AG; FedEx Corporation; United Parcel Service Inc.
- Bickerton, Ian, "TPG Replaces Logistics Chief," Financial Times, August 5, 2003, p. 14.
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- Echikson, William, "Privatization: Posts with the Most," Business Week, August 17, 1998, p. 18.
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- Hastings, Phillip, "Rush to Repackage," Financial Times, June 17, 1999.
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Source: International Directory of Company Histories, Vol.64. St. James Press, 2004.