New challengers set to blow European road express apart

New players are set to seriously challenge the big global integrators in the fast-growing European international road express market. They will include national parcel operators and freight forwarders.

That was one of the arguments put forward at this month’s World Mail ‘ Express Europe conference in Brussels. However, industry observers questioned that suggestion, asking where the new market entrants would come. They also pointed out that both groups of potential additional competitors had tried in the past to move into that sector without success.

Opening the debate, German express, parcel and transport industry journalist and consultant Ludwig-Michael Cremer argued that the European international express market was set to see further segmentation between air and road-based operations. TNT already had fully separate pan-European air and road networks, he said, and DHL and UPS were set to follow. FedEx was currently focused on air express and might need to find a partner to develop the equivalent of its FedEx Ground operation in the US.

‘The European road express market will see increasing competition, with new players entering the game,’ said Mr Cremer. ‘Customers will be offered more choice but prices will not rise because of the growing competition.’

Express director for UK-based consultants Triangle Management Services, Robin Parr-Davies, queried whether such market conditions would encourage more operators to move in. ‘If you have increased competition coupled with no price increases, plus high levels of investment required to set up the networks, where, I ask, are new entrants going to come from?’

Mr Cremer suggested that at the lower weight end, the new competitors could include major parcel operators like German carriers DPD and GLS. Meanwhile, leading European forwarders such as Dachser and Schenker would tackle the heavier weight sector of the market. ‘The forwarders will adopt the same strategy as the parcel carriers, first building up national express products and then offering international express,’ he added.

However, chair of the Competition and Market Reform Committee of the European Express Association, Mark van der Horst, queried the need for separate air and road express networks in Europe.

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