UPS: eastern promise
UPS: eastern promise
UPS is set to acquire Polish leading express firm Stolica.
February 9, 2005 1:37 PM GMT (Datamonitor) – US parcel giant UPS [UPS] has confirmed that it will take full control of Polish Messenger Service Stolica in a bid to strengthen its domestic position in one of the fastest-growing economies in the EU. The move highlights the potential of the new EU countries for international express and parcel delivery companies as they race to establish a firm foothold in the region.
UPS has announced that it expects to complete the purchase of Polish Messenger Service Stolica early in the second quarter of 2005. Stolica is one of the leading domestic firms operating in the Polish express and courier market. The company operates Poland’s biggest sorting hub, with 160,000 packages and 120,000 document shipments delivered daily and had a net profit of nearly E49 million in 2004.
The Polish express delivery market is primarily dominated by DHL Express (which acquired local firm Servisco last year), Stolica, Masterlink and TNT Express. These firms will, provisionally, control over 60% of the market. Naturally, the market for international deliveries has been dominated by integrators DHL, UPS and TNT, while local delivery firms have traditionally controlled the domestic segment. Nevertheless, a recent wave of mergers and takeovers of local Polish parcel and freight companies by international players is increasingly changing the landscape and underlines the attractiveness of the Polish market.
Poland is the largest of the eastern European countries that joined the EU in May 2004 and, together with the Baltic States, is regarded as a future strategic logistics hub serving Russia and Ukraine.
It is also expected that the Polish postal and courier market will follow the pace of integration of the EU market, meaning that the regional mail sector will be liberalized. With the weight limit for parcels reserved for delivery by the state operator being reduced in 2006 and eliminated altogether in 2009, the more attractive segments of the postal services market could well fall into the hands of private courier and express firms that decide to expand into Poland.
UPS, like other international express delivery firms operating in Poland, should also benefit from the elimination of export duties and trade barriers, facilitating the delivery of parcels from Poland to the rest of the EU, and increased investment in eastern Europe.
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