Interview with Mr Peter Bakker

Mr Peter Bakker
Mr Peter Bakker
Chairman & CEO

With more than two and half centuries of its existence and excellence in logistics, shipments and freights, TNT N.V. is a publicly quoted conglomerate headquartered in Netherlands. Operating through its two business units: TNT Express division and TNT Post division, as a holding company, TNT sets the agenda for the group as a whole as well as for the individual divisions engaged in an extended range of services around the world: collecting, sorting, transporting and distributing a wide variety of items within specific timeframes. Backed by workforce of over 163,222 employees, TNT marks its global presence by company-owned operations in more than 63 countries. Maintaining delivery and network management as its core competencies, TNT also provides all related data services. Mr Peter Bakker is the CEO and Chairman on the Board of TNT. He joined TPG Post in 1991. In 1996, he was appointed financial control director of TPG Post, and was nominated to the TPG Post Board of Management in 1997. In June 1998, Mr Bakker played role as a Chief Financial Officer of TNT and a member of the Board of Management. He assumed the charge as a CEO and Chairman of the Board of Management in November 2001. Mr Bakker is a Dutch national and holds degree in Economics from the Erasmus University in Rotterdam. Appearing on Face2Face, Mr Peter Bakker shares more on the strategies that have helped his company to distinguish itself as a success paradigm in the logistics sector.

TNT Express has recently won the Bosch Supplier Award in the ‘Logistic Service Provider’. Congratulations for one more feather in the cap! Running down memory lane, can you share some memorable experiences in the life of your company?

There are too many to mention. Looking back at the past 18 months, there is the successful divestment of logistics, our expansion into India, China, Brazil and Spain, and the delivery of our first Boeing B747 aircraft last December. It symbolizes our objective of being the number one carrier between Asia and Europe.

How would you take in for the dictum - Strategy starts with identifying changes? Being at the helm of affairs as a CEO of TNT, how have you exploited on it?

Take globalization. Though our express activities directly benefit from the growth in international trade, express is a regional market. TNT thinks that building local and regional strength is the best way to capture growth in India, China, Southeast Asia, and Brazil.

As for customers, we have conducted an extensive market research showing increasingly similar needs across the globe. That explains why we are launching a new portfolio of services to offer customers the same core time-definite and day-definite services, with identical names and features. We want to show one single face to our customers wherever they operate.

Demographic changes include the growth of mega cities, which poses constraints to inner-city deliveries, as you know very well in India. There is no one-size-fits-all solution, but in London for instance, we will rely more and more on electric trucks, which are exempt from congestion tax.

Maybe the most important trend of all is the imperative to cut the world’s CO2 emissions. If the transport industry does not tackle climate change, consequences will be severe both for the industry and the planet. In August, I presented in London TNT’s strategy to reduce CO2 emissions from our operations.

Can you pick the key industry sectors that TNT delves in?

TNT is both a European postal company and a global express services company. What is little known is that business customers are by far the largest mail senders. Take for instance financial institutions, telecom companies, energy providers, publishers, etc. As for express, we serve companies of all sectors, including automotive, textile, semiconductors, electronics, telecoms, pharmacy.

Logistics and Supply Chain play a vital role in profiting businesses like apparel, textile, fashion, or retail industries, how is TNT contributing on this front?

TNT offers express delivery services to textile customers. On top of it, our express division has a subsidiary called TNT Fashion Group, which is a European market leader in shared user retail distribution services. We offer our customers a variety of unique services: door to door, same day, next day, three day and nominated day delivery. TNT Fashion Group offers extensive European retail collections network and distribution services.

How does TNT distinguish itself in face of competition?

Our strategy is very differentiating, whether it comes to geographic focus, product portfolio, infrastructure, or social responsibility. We have decided to focus on Europe and a selection of countries in Asia, South America and the Middle-East, concentrating on intra-regional and domestic markets rather than on intercontinental routes. That is because the biggest express delivery markets are domestic. Only 5 percent of volumes shipped in express delivery networks move between continents. As for our products, TNT on September 17 launched the widest range of international and domestic morning delivery services, including two new products, “10:00 Express” and “12:00 Economy Express”. With respect to our network infrastructure, we rely proportionally more on road transportation than the competition. And TNT’s strategy pays off. The group revenues rose by 9.6% in the first half of 2007 over the same period of last year.

How has TNT adopted technology upfront?

We test promising solutions and implement them on a larger scale when they prove successful. For example, we have been the first express player to introduce a zero emissions electric vehicle in Europe after a successful trial in London. In India, TNT launched a pilot project in April 2007 to use bio fuel for its delivery vehicles. The first phase saw specially trained drivers run three bio fuel trucks between Pune, Nasik and Bangalore. The project makes business sense and TNT has decided to operate twenty more bio fuel trucks in India.

As for IT, we prefer to be an early evaluator rather than an early adopter of new technologies, which may lack maturity. RFID is a good example. We have investigated the effectiveness of the technology for five years. We have seen new standards emerge and unit costs go down. TNT implements several RFID-based solutions for some customers, and we have built the IT infrastructure to put RFID tags on more packages, but the technology must first become more reliable and cost effective.

What future innovative logistical solutions can be expected from TNT?

Our new morning delivery services are a good example. TNT’s new “12:00 Economy Express” service is the first time-definite economy product available on the market. Innovation does not necessarily take sophisticated technologies. Processes are as important. For instance, we found that we can deliver shipments on time while reducing our fuel consumption and CO2 emissions simply by optimizing our road network. In 2008 and 2009, TNT’s express division will implement a new road network planning system in Europe, enabling our sites to exchange information on the available transport capacity and avoid empty kilometers.

TNT made itself a synonym for fastest services. How about its pace on corporate social responsibility course?

In 2007, TNT ranks first in the Dow Jones Sustainability Index for the “Industrial Goods and Services” supersector. The results were announced earlier this month. That puts us ahead of any of our competitors, but also among the best companies regardless of the industry.

In August 2007, we also announced a company-wide program to cut our CO2 emissions. The program is called Planet Me and it builds on three elements. First, we are determined to improve transparency on the company’s carbon footprint by setting up a certified system to measure and report on our CO2 emissions. Second, TNT is taking actions to slash CO2 emissions in eight operational areas: aviation, buildings, business travel, company cars, partnering with customers, operational fleet, procurement, and investments. Third, we call upon our 159,000 employees to do a similar effort at home and on travel. For a growing transport company like TNT, reducing CO2 emissions is extremely challenging. However, we want to become the first zero emissions express and mail company in the world. And of course, we are about to celebrate the fifth anniversary of our partnership with the United Nations World Food Programme.

Published on: 01/10/2007

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of