Air Freightnrussian Express delivery firms see 25% annual growth
LLOYDS LIST 10th October 2001
AIR FREIGHTNRUSSIAN EXPRESS DELIVERY FIRMS SEE 25% ANNUAL GROWTH
By JOHN HELMER IN MOSCOW
Shipping and ports sector report greater growth rate. AFTER a year of crisis, followed by a year of stagnation, the Russian market for express delivery of documents and packages is now expanding by almost 25% per annum.
Growth in some sectors of business for the international delivery companies is even faster, notably in the shipping and ports sector, according to third-quarter results at DHL.
Garry Kemp, DHL’s Moscow-based general manager for the CIS, told Lloyd’s List that inbound cargo ‘has been growing this year by around 25 compared to a year ago. But in the third quarter, we have seen a slight acceleration in the growth rate’.
He expects this trend to be unaffected by the short-term disruption of US business after attacks of last month. ‘There was a slowdown for 10 days,’ he said. Although the US is the third largest country served by DHL’s Russian operations, less than 10% of the aggregate volume of documents and parcels carried by DHL into and out of Russia involve the US.
Growth in shipbuilding and in cargo volumes at Russia’s ports have powered an acceleration which DHL has registered this year in courier services for the Russian maritime sector, which has jumped to about 18% of the volume of inbound movements. The manufacturing sector leads with 25% – mostly samples and spare parts – followed by the oil and gas sector, and the automotive sector, each with around 20% of inbound movements.
These are big changes, industry analysts say, compared with the period just before and just after the Russian financial crisis of August 1998, when the Russian treasury and commercial banks defaulted, and the rouble fell fourfold. DHL’s business fell 30 according to Mr Kemp, with an even deeper drop in volume from the banking sector.
A 1999 report commissioned by the Foreign Commercial Service at the US Embassy in Moscow noted that the predominance of inbound over outbound movements would change as imports to Russia fell. The report also forecast that lower cost domestic courier services would gain market share at the expense of the international companies.
Mr Kemp says that DHL has held its market position relatively unchanged at around 50 while TNT and United Parcel Service have continued to hold between 15% and 18% shares. The figures indicate that market share has not significantly shifted as Russia’s economy has recovered. The Russian government is expecting 5.5% GDP growth this year, and not less than 4% growth next year. This is making Russia the fastest growing area of Europe for the express delivery companies.
This year the value of the Russian market in international document and parcel services is between Dollars 100m and Dollars 150m. The US report valued the market at Dollars 100m in 1998.
According to Mr Kemp, the ratio of inbound to outbound movements is now 1.7 to 1, compared with 3 to 1 before the 1998 collapse.
But the international companies have managed to ward off domestic competitors like Pony Express, EMS Garantpost and others.
‘We would expect to see our domestic business shrink, but so far this isn’t happening,’ Mr Kemp told Lloyd’s List. Copyright 2001 Lloyds List. Source: World Reporter (Trade Mark) – FT McCarthy.
