CBI member, DHL has announced that it has concluded a landmark deal to transfer its supply-chain operations in China to SF Holdings – China’s largest courier company.
The transaction involves DHL’s supply-chain business, and has no bearing on DHL’s activities in international express, freight transport and e-commerce logistics in China. SF Holdings will take over day-to-day operations of DHL’s domestic supply chain and pay DHL a revenue-based partnership fee for 10 years and a one-off payment of £620 million. DHL will support SF by co-branding the business with trademark licenses, customer referrals, providing employee training and sharing best practise.
Frank Appel, CEO of DHL Group said, “This supply-chain alliance with SF is a strategic milestone for 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.”
The partnership highlights how foreign and Chinese companies compliment each other well to address barriers inhibiting their growth in the China market. Through partnering with SF, DHL will gain access to a large localised workforce of KuaiDi drivers and be plugged into SF’s extensive delivery network. On the other hand, SF benefits by being able to expand its client-base by being able to appeal to a new type of client who wants to deal with a highly-reputable foreign service provider by being able to use the DHL trademark. Moreover, the deal demonstrates how there is opportunity for foreign companies in China who are capable of sharing their experience in delivering a high-quality service model and best practises with Chinese companies eager to develop and mature.
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