Danzas Group - Company Profile, Information, Business Description, History, Background Information on Danzas Group

Peter Merian-Strasse 88
CH-4002 Basel

Company Perspectives:

Among international logistics firms, Danzas now occupies a leading position in all business sectors. The transformation process is by no means finished, however. In view of the changing needs in today's market, every logistics company has to remain flexible and innovative. Services have to be continually optimized and extended if the group is to be capable of meeting tomorrow's requirements. That's why unwavering orientation to market demands and thus to the needs of individual customers takes center stage in Danzas's philosophy.

History of Danzas Group

Danzas Group is one of Europe's leading logistics groups, the European leader in overland freight-forwarding and logistics, and the world's leading air cargo forwarder. The company is also a subsidiary of Germany's Deutsche Post, overseeing that growing and soon-to-be privatized company's logistics operations. Danzas continues to operate from its Basle, Switzerland-headquarters. Yet, through Deutsche Post, Danzas has been on a buying spree that has tripled its sales in a little less than two years. Danzas's acquisitions at the turn of the millennium include Air Express International, ASG AB, and Nedlloyd ETD, bringing total sales to nearly SFr 12 billion and expanding the company's worldwide workforce to nearly 40,000. Danzas has also been expanding throughout Eastern Europe, notably in Hungary, with its takeover of that country's Danubiasped, and in South America, with the integration of Chile's Deca Express SA. The company's operations are structured into three primary divisions: Intercontinental, Eurocargo, and Solutions. Danzas is led by Peter Wagner, whose official title is chairman and CEO of Deutsche Post's Logistics Corporate Division. That company has been preparing its initial public offering in advance of the ban on postal monopolies among European Community member countries, to be implemented in 2003.

Rising from Defeat at Waterloo

Danzas's history traces back to the European conflict that culminated in the battle of Waterloo in 1815. For much of the company's history, Danzas, first French, then Swiss, struggled to maintain its communication and transportation links against a background of European wars and political troubles.

After the resounding defeat of Napoleon's Grande ArmĂ©e at Waterloo, a demobilized young French lieutenant named Marie Matthias Nicholas Louis Danzas, or Louis Danzas for short, joined a small freight forwarding company, Michel l'EvĂȘque, Etablissement de Commission et d'ExpĂ©dition, in St. Louis, France, just across the border from Basel, Switzerland. Within a very short time he was appointed the company's procureur gĂ©nĂ©ral et spĂ©cial. Louis Danzas was an Alsatian, but his family traced their origins to Gascony and Spain; the name was originally spelled D'Anzas.

In 1840 Danzas and his brother-in-law Edouard l'EvĂȘque formed the Maison de Commission et d'ExpĂ©dition Danzas & l'EvĂȘque a St. Louis. Seven years later Danzas and l'EvĂȘque took their first step toward expansion by opening a branch in the nearby city of Mulhouse, France.

The company was well placed to take advantage of the new technology and the rapidly expanding rail and steamship routes in this part of Europe. Danzas began to build up a worldwide network of agents. In order to handle the regular groupage--the organization of combined freight units for joint transportation--traffic between ZĂŒrich and Basel, they merged with the transport companies Favier-Gervais Vonier and Ouzelet & Cie to form a new general partnership, Danzas, Ouzelet & Cie, in 1855. The firm then had Ouzelet's former offices in Basel as a Swiss branch. The new service accĂ©lĂ©rĂ© may have been the world's first rail groupage service. In 1859, the firm was renamed Danzas, l'EvĂȘque & Minet--the latter was a partner in the former Ouzelet firm--but the company remained French, headquartered in St. Louis, and Louis Danzas remained the undisputed senior partner of the rapidly expanding company until he died in 1862.

His son, Emile Jules Danzas, succeeded him. Initially he had favored a military career, but his father wanted to found a Danzas business dynasty and sent Emile to work and train in the ports of Hamburg and Le Havre. When Emile received draft papers from the French army during the Crimean War in 1855, Louis Danzas found a young bricklayer to take his son's place in the military for FFr 900 and used his influence to persuade the local authorities to accept the substitution. Edouard l'EvĂȘque retired in 1865, and the company's name was changed to Danzas & Minet, Commissionaires, ExpĂ©diteurs, Correspondence avec les Chemins de fer, Agence en Douane, Ă  BĂąle & St. Louis.

Alsace became German at the end of the Franco-Prussian War in 1871. As a consequence, the Danzas company would eventually become Swiss. Jules Danzas was a French patriot and could not live under the new German Empire. He moved his family and business, first across the new border to Belfort, France, and then to a more geographically advantageous base at Basel, where he signed a declaration of French citizenship before the French consul. He began to expand his branch network in Switzerland.

Rising Swiss prosperity, new mountain tunnels, and rail links enhanced Basel's role as a trade center on the Rhine River at the point where Germany, France, and Switzerland meet. The Danzas company took advantage of this geographic position to forward freight between these countries and to the larger continent beyond. In 1884 Danzas obtained a subcontract from the Swiss post office for international post deliveries. Even at this time, the company was able to guarantee 24-hour Switzerland-to-London postal service.

In 1878 Jules Danzas had converted Danzas & Minet into a sole proprietorship, but he had no son. By 1884 he had made his colleague Laurent Werzinger a partner; by 1886 Danzas sold most of his interest to Werzinger and retired to Paris, where he died in 1917. Alsace reverted to France a year later after the German defeat in World War I, but by that time the company had established firm roots in the major Swiss commercial city of Basel.

Growth in the 20th Century

Under Laurent Werzinger the company expanded its branch network and acquired an interest in a Rhine steamship company, Basel Rheinschiffahrt AG. High priority was given to the development of branch offices and international groupage services. Because Danzas had become a national household name and was also known internationally, Werzinger decided to retain the name when he incorporated the company as Danzas & Co. AG on January 1, 1903, with a share capital of SFr 2 million, divided into 400 registered shares with a nominal value of SFr 5,000 each. He also diversified into the travel agency business, opening offices in all regions of Switzerland and also in France. The firm retained a family character when Albert Werzinger, who had joined Danzas in 1883, succeeded his father as chairman in 1911. He remained chairman for 37 years and saw the company through the difficult political problems posed by Switzerland's neutrality in World War I and World War II. At the end of World War I, the company's international operations were threatened by French government reprisals for supposed disloyalty by the legally neutral Danzas company. Werzinger's negotiating skills and tact in putting French notables on the Danzas board contributed to ending the crisis and restoring normal Danzas business in France, the company's most lucrative market. By 1908 the Paris office had a staff of 80, engaged in&mdashÂŻong other things--the import of Swiss fabrics for Paris fashion houses, but Danzas also was able to incorporate a separate German subsidiary, Danzas GmbH, in 1919. The company became increasingly involved in seagoing traffic out of the northern European ports.

Danzas incurred substantial losses in the aftermath of the stock market crash of 1929 and found the going rough in the generally depressed world trade scene of the 1930s. A brief upswing in its fortunes was brought to an abrupt end with the outbreak of World War II. Branches in France and Germany were largely shut down in 1939 and those in Italy were closed in 1940. Danzas concentrated its efforts on Switzerland's supply line via neutral Portugal. Hans Hatt, a future Danzas chairman, spent the war years in Lisbon helping maintain this traffic.

Danzas suffered great material and personnel losses during World War II, but its base in neutral Switzerland remained intact, allowing the company to make a speedy postwar recovery. In 1948 Hans Hatt's 73-year-old father, Fritz, succeeded Albert Werzinger as chairman. Under his leadership the network of branches was expanded in Switzerland, France, Germany, and Italy. The company's name was changed to Danzas AG in 1960.

After Hans Hatt became chairman in 1963, the company began to expand outside, as well as within, Europe. New branches were established in Greece, Spain, and Portugal. Representative offices were set up in Latin America and New York and other commercial centers. Many of these were to become the basis for future subsidiary companies. Danzas Travel, concentrating on business and custom-tailored trips, continued to grow.

In 1979 David Linder, a lawyer and member of the Swiss Parliament, was appointed to the dual position of chairman and president. Danzas's registered shares began to be traded on the Basel Stock Exchange in 1985, after shareholders' approval of increased capitalization to SFr 10 million at an annual general meeting. Two years later, at another annual general meeting, the creation of participation certificate capital shares to be traded on the Basel, Zurich, and Geneva exchanges was approved.

International Expansion in the 1980s

International expansion continued throughout the 1980s with the takeover of the British Gentransco Group and the founding of new subsidiaries in Belgium and the Netherlands. By 1984, the Danzas office in Australia became a full-fledged subsidiary. In the following year, Danzas took over several important distribution companies including SATEM S.A. in France and S.A.D. S.A. in Spain, and to cover the United States founded Danzas Tuya S.A.--a Panamanian-registered company--in Miami, Florida.

In 1987, Danzas took over SBT NV in Belgium. New affiliate companies were established in Japan, Taiwan, and Hungary. With the purchase of Northern Air Freight of Bellevue, Washington, in 1989, Danzas had established representative offices in 36 countries and 41 U.S states. By 1991 the company was entering a period of restructuring and consolidation to absorb these new acquisitions.

Capital assets also increased as Danzas developed a policy of providing its own in-house facilities and resources. Investment in real estate, vehicles, and telecommunications assets grew throughout the 1980s. Danzas also promoted its organizational expertise in storage and transportation. In a notable agreement, Jacobs Suchard, the chocolate maker, hired Danzas to set up an automated warehouse system.

On April 1, 1989, David Linder was appointed president of the board of directors. He was succeeded as delegate of the board and chairman of the executive committee by Bernd Menzinger.

The European Community (EC) made a significant step toward deregulation of transportation on July 1, 1990, when it ended national restrictions that had prohibited trucks based in one country from carrying goods within the borders of another member state. The move, along with the opening of East European borders and markets, was widely seen as starting a process that would transform the goods transportation industry.

Some observers predicted an industry shakeout with the removal of protectionist measures. Small- and medium-sized trucking firms were faced with selling out to larger rivals or allying themselves to the majors as subcontractors. In addition, new overseas competitors appeared on the scene, including Mitsui from Japan, TNT from Australia, and Federal Express from the United States.

Danzas and other big freight transport companies were meeting this challenge not just with acquisitions but by diversification and by expanding their European networks with new routes and methods. For example, the company's new, computer-controlled Cargovia system organized large, full-load shipments for industrial firms across Europe. Its Danznet information system allowed the company to coordinate warehousing and distribution.

Danzas GmbH, the German subsidiary that contributed 20 percent of the company's turnover, spearheaded a move into eastern Germany. A new terminal in Halle would enable the firm to offer exporters and importers regular groupage services to East Germany. An Eastern Europe coordination department was set up to maintain contacts, evaluate opportunities, and set priorities. Danzas was negotiating with many Eastern European countries on possible new companies and joint ventures. Elsewhere in Europe, Danzas created a 'flexible pipeline' to allow Bosch, a German electronics manufacturer, to supply the British car-manufacturing industry through the Danzas terminal in Colehill, West Midlands.

Global Logistics Powerhouse for the 21st Century

The Wall Street Journal of July 23, 1990, predicted that only ten to 15 European companies would survive deregulation of the freight transportation industry. Danzas was expected to be one of these firms. Along with two other major Swiss contenders, KĂŒhne & Nagel and Panalpina, it suffered the disadvantage of not having headquarters in a European Community member state, but emphasis on an international identity and the importance of its subsidiaries, particularly its powerful French company, with a staff of more than 5,000, minimalized the problems. More troubling for Danzas, however, was its unwieldy empire of hundreds of small companies, lacking for the most part any form of central direction.

Peter Gross took over the company's top spot in 1992, in time to lead Danzas through a new crisis. The end of customs barriers throughout the European Community resulted in a sales drop of 35 percent in 1993. By 1995, the company's sales of SFr 6 billion had managed to return a profit of just SFr 5 billion. In response, Gross led Danzas through a complete reorganization, restructuring itself as a modern holding company with a more streamlined and efficient management structure. Danzas began looking for a partner to help boost it snugly into the big leagues of global logistics providers. Meanwhile, Peter Wagner was appointed as CEO to help turn around the troubled company.

Danzas's restructuring helped restore the company to strong profit growth by 1997. Under Wagner, the company was now refocused on four core areas of operations--Intercontinental, Eurocargo, Consumer Solutions, and Industry Solutions--while Danzas began looking to make a number of strategic acquisitions and partnerships to broaden its international scope. Among the company's possibilities was an alliance with its two big Swiss rivals, Kuhne & Nagel and Panalpina, to form a single giant Swiss corporation. Wagner, however, chose a different route, explaining to Bilanz: 'There would have been quite a bit of overlapping. The strategic course would have been affected and then there was the cultural aspect. Danzas and Panalpina, for example, are simply incompatible.'

Instead, at the end of 1998, Danzas surprised the logistics community when it allowed itself to be acquired. In December of that year, the company reached an agreement with the German postal monopoly--and Europe's largest postal service&mdashĂž be acquired as part of Deutsche Post's plans to emerge sometime later as the publicly traded World Net. The acquisition gave Wagner the war-chest to pursue Danzas's ambitious acquisition program. Even as its acquisition was still being finalized in early 1999, Wagner had already begun to shop for new additions to the company.

The first two came in April 1999, when Danzas acquired Sweden's ASG AB for EUR 374 million. The company immediately followed that purchase with the acquisition of the Netherland's Nedlloyd's ETD unit. Wagner prepared his biggest surprise for the end of 1999, when the company announced its intention to acquire Air Express International, the leading freight forwarder in the United States, for $1.4 billion. These three purchases helped to triple the company's sales, and by the end of 2000, Danzas had become an international giant with sales of nearly SFr 12 billion and leading positions in much of its primary markets, including the European leadership in overland cargo and worldwide leadership in air cargo transport. Each of the company's new operations were now united under the Danzas name&mdash Danzas AEI, Danzas ASG, etc.&mdash the company began preparations to merge its acquisitions into its existing structure.

After spending all of 2000 absorbing these acquisitions, Danzas set out to boost its positions in selected geographic markets in 2001. Such was the case with its integration of Chile's Deca Express, formally the exclusive agent of Air Express International in that country, as Danzas AEI Chile SA. The company also moved to take full control of a former AEI joint-venture in Lebanon. The Danzas AEI Lebanon unit was then poised to function as the company's operational center for Syria, Lebanon, Jordan, Iraq, and Iran. Back home, Danzas prepared to take part in Deutsche Post's forthcoming initial public offering, expected to be valued at DM 9 billion. With its domestic postal monopoly to be ended in 2003--yet with ambitious plans to extend its position across the European Community--Deutsche Post looked on its Danzas Group operations as a central piece in an empire that could one day make even Napoleon proud.

Principal Subsidiaries: Danzas AIE; Danzas ASG; Danmar Lines AG; Danzas Reisen AG; Imadel AG (95%); Danzas Pty Ltd. (Australia); Danzas AG (Austria); Danzas NV (Belgium); SBT NV (Belgium); Danzas GmbH (Germany); Danzas & Dittes GmbH (Germany; 50%); Danzas HP (France); O.G.T. SA (France), Transvet SA (France; 50%); Danzas AE (Greece); Danzas (UK) Ltd.; Overall Transport (UK) Ltd.; C.A.T. Nationwide Carriers Ltd (U.K.); Baker Britt & Co Ltd (U.K.); Chemoldanzas KFT (Hungary; 50%); Delta Transport S.p.A. (Italy); Italdanzas S.p.A. (Italy); Samec S.p.A. (Italy); Danzas K.K. (Japan); Danzas BV (Netherlands); Danzas (Singapore) Pte Ltd.; Danzas (Southern Africa) Transport (Pty) Ltd.; Danzas SAE (Spain); Danzas Corporation (U.S.A.).

Principal Competitors: AĂ©roports de Paris; Grupo Aeroportuario del Sureste, S.A. de C.V; BAA plc; Chicago Airport System; Dallas & Mavis Specialized Carrier Co; DSC Logistics; GeoLogistics Corporation; ICTS International N.V.; KĂŒhne & Nagel International AG; M.A.C. Freight Services, Incorporated; Panalpina World Transport (Holding) Ltd; Phoenix International Freight Services Ltd.; Pilot Air Freight; Royal Vopak NV; Stinnes AG; Tibbett & Britten Group plc; Transport Development Group PLC.


Additional Details

Further Reference

Ambuhl, Iso, 'Wagner Shows the Way with Danzas,' Cash, January 26, 2001.Danzas from 1815-1990, Basel: Danzas AG, 1990.Ewing, Jack, 'Pushing the Envelope,' Business Week International, September 11, 2000, p. 22.The History of Danzas: From Waterloo to the New Millennium, Basel: Danzas Group, 2001.Parker, John, 'Danzas Expands,' Traffic World, February 12, 2001.Simpson, Ian, 'Deutsche Post Buys Air Express,' Reuters, November 15, 1999.Wild, Karl, 'Badly Underestimated,' Bilanz, January 2000.

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