TNT quietly builds US presence

Despite investing over $20 million in the US, it has no plans to take on FedEx,
UPS
The brouhaha over Deutsche Post’s takeover of DHL Worldwide Express has
overshadowed recent initiatives by TNT to expand its business in the U.S.
While DHL, whose ownership status is being challenged by FedEx and United
Parcel Service, hopes to play in the same league here as the two giant
integrators. TNT has no such aspirations. Still, TNT, whose customers include Abbott Laboratories, Pepsico, Playboy and
the World Bank, has quietly ramped up its presence in the U.S. Over the past
two years, it’s invested $20.5 million in the U.S., primarily in technology,
depots and trucks.
The Netherlands-based company plans to open three more terminals by the end of
the year, with the most likely candidates being in Atlanta, Dallas and
Detroit, according to Curtis Watson, president of TNT International
Express-USA.
The new facilities would complement the eight that it has opened in recent
years, primarily on the East Coast, but also in such cities as Chicago and
Houston.
The carrier has a formidable presence in Europe with 61 aircraft. It entered
the U.S. domestic aviation market by launching a service in March linking 14
metropolitan markets.
Watson admits that the carrier, which uses commercial airlines and its own
pickup-and-delivery network for this traffic, doesn’t expect to gain “huge
market share” as a result of the new service, called USA Express.
Instead, the goal is to give customers that already use TNT for international
express shipments a broader menu.
By using TNT domestically as well as internationally, customers will get fewer
invoices and thus have less paperwork.
And while dominant players such as FedEx have adopted zone-based pricing in
the United States, TNT offers a flat rate for customers shipping to any of the
markets covered by the service. Shippers can put as many documents that fit
into a USA Express envelope, with next-day delivery for $7.35.
TNT also added an express letter feature to its international service in
March, offering a flat rate with no weight restrictions for all non-dutiable
shipments such as documents.
In addition, the company dropped its eight-zone map for global shipments in
favor of a simplified four-zone structure.
Such initiatives, which Watson describes as part of TNT’s internal growth
strategy, are designed to build up the company’s outbound business to match
the inbound document traffic it handles from Europe and Asia.
TNT Post Group, which had $9.2 billion in revenue last year, does not disclose
regional results, but spokeswoman Isabelle Weisman said its U.S. business grew
15 0n 2000 and that the carrier is expecting 9% to 10 0rowth this year.
Watson said the company is doing that by adding customers and providing new
services for existing customers, thus offsetting lower volumes in their
existing base. JOURNAL OF COMMERCE, 23rd July 2001