Headline

Germany was reunified. The Eastern Bloc collapsed. The internet made strides as a new medium. The word “globalisation” entered everyday language. A sheep called Dolly was the first cloned creature. Pursued by the paparazzi, Princess Diana died in a car accident in Paris. Technoculture dominated music, fashion and human interaction.

And Hermes conquered new markets…

FRGDR

German unification was a cause for great joy. It also represented a challenge for many, including Hermes Versand Service, which started making deliveries in the GDR shortly after the wall came down.

But simply mentioning milestones – for example the fact that Hermes was able to make deliveries throughout East Germany from the time of the currency union on 1 July 1990 – hides the efforts that went into achieving them. Improvisation was essential because Hermes was easily the first West German logistics company to operate in East Germany. “The main challenge was to rent premises,” remembers Hartmut Ilek, who was Chairman of the Board of Hermes Logistik Gruppe Deutschland (HLGD) until 2011. They were not privately owned but belonged to the state. In order to find any goods handling space at all, we developed a new model and worked for the first time with partners. These included, for example, local haulage firms which owned facilities. The development of our own infrastructure, the next big step, was equally difficult. Hermes therefore made a large number of reconnaissance trips and documented the state of the roads, public transport, large residential areas and their access routes, and even freight stations and doorbell panels.
Communication – by telephone or over the analogue C-Netz – was extremely complicated. However, the main issue was recruiting suitable staff. “We were able to find people for all levels of the hierarchy who were keen to prove their abilities,” says Ilek. And then the business came: alongside clothing, the main demand was for video recorders. The fact that so many branches were initially overwhelmed by the quantities of packages was minor in comparison to the work that had gone before.

Initial plans for Europe

In 1990, 25 West German medium-sized haulage companies merged in order to be able to offer their services nationwide. German Parcel was born. Less than ten years later, in February 1998, Hermes Versand Service and German Parcel concluded a cooperation agreement aimed at developing a joint plan for private deliveries in Europe.

The contract also provided for the setting up of joint ParcelShops where private customers and small firms could collect and drop off their packages. The project went well, and Hermes also took over German Parcel’s cash-on-delivery service. However at the end of the year the company was taken over by the UK Post Office (and later integrated into the Royal Mail Group). This takeover initially led to all projects being put on hold and eventually to the alliance being wound up. In 2002, German Parcel became known as GLS Germany.

The new headquarters

The fruits of growth: over the 1997/98 New Year period, Hermes moved into a new building in the Hamburg district of Langenhorn. Its new headquarters at number 89 Essener Straße was a more friendly and brighter new building.

Entry of the new messenger to the gods

The success of working with partners led to a logical and logistical consequence: small packages of up to 10 kg were now delivered in built-up areas not just by Hermes’ own customer assistants but also increasingly by independent carriers.

While it was mainly housewives who initially were able to increase their income in this way, more and more people soon discovered this flexible opportunity to make money. This particular system won over the managers of various Otto companies, such as bonprix, Witt or SportScheck, which had previously not used Hermes, because they often used small mailing formats such as bags. The Deutsche Post used to be very cheap for them, but Hermes’ prices had now become competitive. The number of consignments sent by these new customers grew disproportionately. While Hermes carried more than 70 million packages in 1995, by 1997 this number had grown to 110 million, and by 1999 to 141 million including letter and catalogue consignments. The structure of Hermes also changed. On the one hand, support points were introduced on industrial estates for the new carriers at which they picked up their deliveries. On the other, the new customers meant that Hermes for the first time set up a structure separate from the Otto mail order company with so-called Star Depots in order to ensure the rapid transport of goods. In November 1997, Hermes delivered its one billionth consignment. This meant that as many parcels had been sent in the previous five years as in previous 20.

Let’s set up two, three, four firms

Triggered by the general euphoria surrounding the internet, the promising growth of e-commerce and the growing business with third-party customers (i.e. not belonging to the Otto Group) gave rise to the creation of numerous new companies under the Hermes brand in the 1990s.

“There was a lot of hype at the time,” says Hartmut Ilek, former head of Hermes Logistik Gruppe Deutschland, self-critically today. “We basically thought we could do anything. We have a call centre, we have people in Otto who can produce a catalogue, we’ll set up a web shop; we know about logistics, and we’re already selling that on the market.” That was the idea behind Hermes General Services, a company which marketed the complete range of services of the Otto trading group. A marketing company pure and simple, it wanted to exploit the two megatrends of e-commerce and outsourcing to competent service providers. When courier services were hived off to Hermes Boten Service GmbH & Co. KG, this gave rise to a subsidiary which specialised in letters and printed matter. Hermedes, the Hermes medical service, was also set up. Its function was to deliver items needed by healthcare institutions such as hospitals and old people’s homes. The Hermes shipment service and Hermes technical customer services department were merged and managed by the newly founded managing company Hermes Service GmbH.
Most of these companies no longer exist today. “When we noticed that there is no need for a supplier who can do everything, we relatively quickly pulled the ripcord on it,” says Ilek. There is some irony in the fact that we are again active in this area today. Having said that, our focus is completely different now because we have specialists in all areas. We only bring these specialists together under one portal, one umbrella brand.