At the time the Berlin Wall fell, Germany's post office was a typical state-run postal system: a money-losing bureaucracy with a bloated staff, outmoded transport systems, and an unclear future as it faced the burgeoning challenge of faxes and e-mails.

Ten years later, the reorganized and revitalized Deutsche Post AG has emerged as the most powerful force in European overland logistics. And - with this month's $1.14 billion deal to acquire Air Express International (AEI), the leading U.S. airfreight forwarder - it is fast becoming one of the world's dominant package and freight firms.Much of the credit for the transformation should go to the vision and the innovative management of Deutsche Post's chairman, former McKinsey & Co. consultant Klaus Zumwinkel, who took control of the postal system in 1990 and turned it into more of a company than a bureaucracy.

But a good part of Deutsche Post's expansion into pan-European and international markets also comes from its deep pockets, which enabled it to spend more than $5 billion over two years. It has been an acquisition binge during which Germany's ''Yellow Giant'' has swallowed or bought into a host of forwarders, integrators, delivery companies and direct-mail firms, from Switzerland's Danzas AG to Ireland's Meadowsfreight forwarders.

Not coincidentally, that buying spree - and the related bolstering of Deutsche Post's prospects in the international logistics arena - has taken place during the approach of next fall's planned initial public offering of Yellow Giant shares, when the German government will sell up to 49 percent of its holdings in the postal service. Deutsche Post's recent expansion and acquisitions will provide plenty of grist for investment analysts' mills.

But two developments that could have a major impact on that stock offering are looming between now and next fall.

The first event, possibly in March, will be the European Commission's ruling on allegations that the German government allowed Deutsche Post to cross-subsidize its money-losing parcel-post operation with profit from its lucrative monopoly on letters weighing fewer than 200 grams. The commission began that inquiry last summer, at the urging of Deutsche Post's biggest parcel-delivery competitor, United Parcel Service.

If it finds against the German government, Brussels could in theory require the Yellow Giant to refund billions of Deutsche marks, hurting the company's bottom line and putting a crimp in further expansion plans.

But postal officials in Bonn claim to be confident that the commission will agree with their argument that the benefits of the letter-mail monopoly have been offset by the requirements that Deutsche Post provide universal postal service and meet huge pension obligations.

''UPS doesn't have to keep open post offices,'' is how one Deutsche Post official summarized the differences between the competing firms. Then again, UPS doesn't reap the profit from a letter-mail monopoly either.

The second crucial development over the coming year will be tougher to quantify, but may end up being more important in the long run: the success of the Yellow Giant and its logistics arm, Danzas, in efficiently integrating all of their recent acquisitions.

Even before the AEI acquisition, about 200 executives from Deutsche Post, Danzas and the newly-acquired companies had formed 13 different task forces - in fields from logistics to IT to the transport network - to try to achieve full integration by May 2000.

Danzas' chairman, Peter Wagner, calls integration ''our primary objective,'' and Zumwinkel concedes that it will be ''tough work.'' But both men say they are confident that their management teams can pull off the integration before next summer.

Other transport-industry experts are less optimistic. Among the biggest doubters are executives at Schenker AG, which has been Danzas' major freight-forwarding and logistics competitor in Germany.

Last week, the chairman of Schenker's parent company, Stinnes AG, blasted Deutsche Post for ''paying crazy prices'' for some of its recent logistics acquisitions. He questioned the post office's strategy in delving into freight forwarding, and predicted that the Yellow Giant would have trouble fully digesting all of its acquisitions.

Meanwhile, the leading German organization of postal customers complained that Deutsche Post is charging among the world's highest prices for first-class postage at the same time that it is making billion-dollar purchases of foreign companies.

And the Yellow Giant's No. 1 international competitor, the ''Brown Giant'' of UPS, has been examining its own options for international expansion. Emboldened by the success of its $5 billion initial public offering this month, UPS now has plenty of spare cash on hand if it chooses to pursue the acquisition path.

Once Deutsche Post loses its letter monopoly, the two firms will find themselves on a more level playing field. Deutsche Post may be expanding faster, but UPS - with its trademark fleet of brown vans - still dominates the key U.S. market.

Stayed tuned for what could stack up to be the major parcel-delivery wrestling match of the new year: Will the Brown Giant go head-to-head with the Yellow Giant on several playing fields at once?