Express operators step up Latin America investment

Leading international and domestic express companies in Latin America have announced investment plans in recent weeks to build up their networks and add new services. Mexico and Brazil are the focus of investment.

DHL Express will invest about USD 112 million (EUR 72 million) in Mexico over the next five years (2008-2012) in new hubs, gateways, the domestic air network, the ground fleet, IT systems and other measures, DHL Mexico director general Luis Eraña told local newspapers.

Estafeta, one of the leading private operators in Mexico, will invest about USD 30 million (EUR 19.2 million) this year to expand its network, director general José Antonio Armendáriz told local media. The bulk will go on a runway extension at its hub at San Luis Potosí in central Mexico that will enable international flight operations. The operator also plans to add three small cargo planes to supplement its existing five B737Fs, and build new centres in Toluca, Morelia, Leon and Guadalajara.

In Brazil, private express company Rapidao Cometa announced earlier this month it will invest RUSD 32 million (EUR 11.8 million) in a 65,000 sqm new logistics centre in São Paulo to triple handling capacity there. The centre, due to open in the second half of the year, will act as a base for the company, whose businesses is mostly generated in northern Brazil, to expand in the south and south-east of the country. “In terms of business distribution by region, the company’s activities are disproportioned,” commented commercial director Américo Pereira Filho.

Brazilian express operator Mercúrio, owned by TNT Express, already announced at the start of the year that it will buy 100 trucks this year to expand its fleet, and will open new hubs at Rio de Janeiro, Fortaleza and Recife this year.

Meanwhile, Brazil Post has played down recent reports it might buy Variglog, the troubled Brazilian cargo airline, in order to build up a domestic air cargo operation instead of relying on commercial capacity. Describing Variglog as an “option”, its president Carlos Henrique Custódio told the newspaper Gazeta Mercantil that Brazil Post is also talking with four smaller airlines about “a new formation” to help its business.

Elsewhere in Latin America, TNT Express has started offering a new air service between Buenos Aires and Montevideo, connecting the two capitals each working day of the week. In Peru, Grupo Scharff, the local FedEx partner company, aims to broaden its portfolio by offering more FedEx products in the second half of this year. The company increased revenues 20% to USD 13 million last year from its FedEx-branded services, according to the El Comercio newspaper. Leading international and domestic express companies in Latin America have announced investment plans in recent weeks to build up their networks and add new services. Mexico and Brazil are the focus of investment.

DHL Express will invest about USD 112 million (EUR 72 million) in Mexico over the next five years (2008-2012) in new hubs, gateways, the domestic air network, the ground fleet, IT systems and other measures, DHL Mexico director general Luis Eraña told local newspapers.

The operator, with 57 locations and 3,000 staff in the country, has already invested about USD 1.3 million to expand its hub at Mexico City’s international airport. Capacity has been increased by 20% to be able to handle 12.9 million shipments a year.

In addition, DHL Express plans a new hub in south-east Mexico, officials said. It already upgraded Mérida, on the Yucatán peninsula, into a regional gateway early last year.

Estafeta, one of the leading private operators in Mexico, will invest about USD 30 million (EUR 19.2 million) this year to expand its network, director general José Antonio Armendáriz told local media. The bulk will go on a runway extension at its hub at San Luis Potosí in central Mexico that will enable international flight operations. The operator also plans to add three small cargo planes to supplement its existing five B737Fs, and build new centres in Toluca, Morelia, Leon and Guadalajara.

Estafeta last year increased net sales by 13% to USD 250 million and carried 25 million shipments, Armendáriz said. It is targeting 15% revenue growth this year, partly to be generated through a new LTL trucking service covering Mexico and the USA.

In Brazil, private express company Rapidao Cometa announced earlier this month it will invest RUSD 32 million (EUR 11.8 million) in a 65,000 sqm new logistics centre in São Paulo to triple handling capacity there. The centre, due to open in the second half of the year, will act as a base for the company, whose businesses is mostly generated in northern Brazil, to expand in the south and south-east of the country. “In terms of business distribution by region, the company’s activities are disproportioned,” commented commercial director Américo Pereira Filho.

Rapidao Cometa, which generates about 80% of revenues from freight transport, also wants to offer more added-value logistics services. In 2007, the company increased its revenues by 23.6% to RUSD 561 million (EUR 206 million) thanks to a larger customer base and new air express services. The company said it aims to grow 30% in 2008.

Brazilian express operator Mercúrio, owned by TNT Express, already announced at the start of the year that it will buy 100 trucks this year to expand its fleet, and will open new hubs at Rio de Janeiro, Fortaleza and Recife this year.

Meanwhile, Brazil Post has played down recent reports it might buy Variglog, the troubled Brazilian cargo airline, in order to build up a domestic air cargo operation instead of relying on commercial capacity. Describing Variglog as an “option”, its president Carlos Henrique Custódio told the newspaper Gazeta Mercantil that Brazil Post is also talking with four smaller airlines about “a new formation” to help its business.

In response to Variglog’s financial difficulties, rival airline Gol plans to expand its cargo business, branded as Gollog, by launching a new express parcel delivery service, to be called Gollog Express, in May.

Elsewhere in Latin America, TNT Express has started offering a new air service between Buenos Aires and Montevideo, connecting the two capitals each working day of the week. In Peru, Grupo Scharff, the local FedEx partner company, aims to broaden its portfolio by offering more FedEx products in the second half of this year. The company increased revenues 20% to USD 13 million last year from its FedEx-branded services, according to the El Comercio newspaper.