DHL sets up strategic partnership for supply chain operations in China

Deutsche Post DHL Group will transfer its supply chain operations in China to S.F. Holding in a ten-year strategic partnership to grow this business in China.
As part of this deal, Deutsche Post DHL Group (DP DHL) will receive an upfront payment of RMB5.5bn (approximately €700m) and a revenue-based partnership fee over the next decade.
S.F. Holding, a leading premium logistics service provider in the country, will have access to DP DHL’s best-in-class supply chain services, management expertise, transportation and warehousing technology. The co-branded organisation will operate under the leadership of Yin Zou, the current chief executive, Greater China, of DHL Supply Chain, along with his existing management team.
The transaction involves the supply chain business in mainland China, Hong Kong and Macau, referred to as “China” in the statement. It has no bearing on DP DHL’s business activities in international express, freight transport and e-commerce logistics solutions in China.
This strategic partnership will allow DP DHL to continue to participate in the fast-growing Chinese supply chain market, leveraging S.F. Holding’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 joint capabilities of Deutsche Post DHL Group and S.F. Holding will create a unique platform to meet the need for a high quality end-to-end supply chain provider in China,” said Frank Appel, chief executive DP DHL.
“S.F. Holding’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.”
Dick Wong, chairman of S.F. Holding, said: “S.F. Holding has been actively expanding its business-to-business capabilities and pursuing different strategic partnerships to grow S.F. Holding 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.
Photo: Jeffrey Chan, chief strategy officer, S.F. Holding (left) and Pablo Ciano, executive vice president, head of corporate development, DP DHL at the signing ceremony in Shanghai, China on October 26, 2018.