Deutsche Post to Send Parcels by Bus to Fend Off Amazon, Google

Deutsche Post AG, Europe’s biggest mail service, is examining plans to transport parcels in the holds of long-distance buses in a bid to speed deliveries as Web-based retailers led by Inc. establish rival logistics arms.

The plan would utilize a German network of yellow buses that carries passengers between 120 cities spanning Hamburg to Munich, Juergen Gerdes, who heads Deutsche Post’s Bonn-based parcel and e-commerce operations, said in an interview.

Transporting parcels by bus should reduce delivery times compared with Deutsche Post’s usual distribution network and fit in below its DHL Express service, potentially offering a cheaper option for business customers and a faster one for residential clients. The plan is part of a strategy of testing out delivery methods, such as lockers, and seeing which stick, Gerdes said.

“We’ll go with whatever our customers prefer,” said the executive, who is aiming to lift operating profit from mail and parcel delivery 3 percent a year until 2020. “When we developed the parcel locker more than 10 years ago, no one but us believed it would work. Now it has 8 million registered users.”

Like other traditional mail companies, Deutsche Post has seen a delivery network that proved adequate for decades come under pressure as letter volumes fall and the rise of Internet shopping makes non-express parcels the fastest growth market.

EBay, Google

At the same time, Web-based customers such as Amazon and EBay Inc. are working on in-house transportation, as is Google Inc., while traditional retailers like Wal-Mart Stores Inc. are developing home-delivery services for online purchases.

Moving packages by inter-city bus would boost Deutsche Post’s carrying capacity while keeping deliveries under its control. The fleet of 90 yellow Scania buses is operated by the company’s Mobility arm and branded Postbus, even though it has only ever carried passengers since being established in 2013.

The new plan harks back to Germany’s former Kraftpost operation, a more traditional form of postbus that accepted paying passengers on mail services and ran from 1905 on routes that were once the preserve of stagecoaches. Gerdes said it’s not yet clear how Postbus parcels would get to the end customer.

With the majority of residential clients out during the day, Deutsche Post’s biggest challenge is to boost first-time deliveries so that most packages are successfully handed over. It’s now rolling out evening dropoffs to catch more people home.

The locker system is also key to its strategy, led by a network of more than 2,600 on-street Packstations -- automated booths where registered users can collect or post parcels 24 hours a day. The company also offers smaller package boxes or Paketkasten for the home, which it began providing free to apartment blocks in Berlin and Dortmund from April in alliance with Deutsche Annington, Germany’s largest housing company.

DHL Express has meanwhile begun using helicopters to move packages from London Heathrow airport to Canary Wharf, avoiding roads, and was first to make scheduled drone deliveries -- to the Wadden Sea wetlands -- beating Google and Amazon, though the expansion of such operations is under regulatory review.

DHL, Amazon and Volkswagen AG’s Audi unit have even tested drop-offs in the trunks of parked cars unlocked by delivery staff using a special access code.