FedEx, Blue Dart to part ways in India
FedEx has decided to invest more in India, and break free from the arrangement with Blue Dart Express, India's largest domestic courier company.
Once their contract expired in September 2002, the world's largest air express company will go alone to explore the fast-growing Indian logistics market, said industry officials. The US multinational, keen to end its contract, has been in the process of setting up its own infrastructure in India.
Tushar Jani, chairman and co-promoter of Blue Dart, said the promoters have subsequently decided to sell 17.83 percent stake in the Indian company.
Currently, Indian promoters hold a total of 51.07 percent stake in Blue Dart, with Clyde Cooper and Khushroo Dubash holding 33.24 percent.
Together with FedEx, Blue Dart has access to over 211 countries worldwide and it distributes FedEx's shipments throughout India.
Over the years, Blue Dart has made great inroads into the domestic marketplace where it enjoys over 38 percent of the market share.
Besides, it invested in an efficient network, coupled with infrastructure including three cargo aircraft.
———————————————–
ECONOMIC TIMES (INDIA) 10th August 2002
BLUE DART, FEDEX TO END ALLIANCE
: Blue Dart is breaking its alliance with Federal Express. The current agreement which is expiring on September 30 is unlikely to be renewed.
The main reason for break-up of the alliance, which was one of the oldest in Indian courier industry is reported to be the premium pricing of Blue Dart.
Under the agreement while Blue Dart distributes the India bound FedEx parcels in the domestic market FedEx distributes the international parcels booked by Blue Dart clients in India.
According to sources in the industry FedEx has been the offered very low rates for distributing its parcels in India by small courier companies who are desperate to get FedEx business.
Asked to comment on the development, Tulsi Mirchandani, vice-president business development and marketing, Blue Dart, said, "We are disengaging from the contract in its present form in the interest of Blue Dart. We can't say more than this at the moment." Clyde Cooper, managing director was unavailable for comment despite repeated attempts.
However FedEx office in India denies any such move. Says Birender Ahluwalia, head marketing, Indian Sub-continent and middle east, "As far as we are concerned, the agreement is still on and up for renewal on October 1".
According to industry sources, the break-up could result in a major dent on Blue Dart's revenue in current fiscal as the FedEx alliance was a major contributor to the company's revenue.
"Blue Dart's chances of tying-up with any other international major is slim since all the major international players are already have tie-ups in India," says a competitor.
According to Ms Mirchandani, Blue Dart is studying all the options open to the company after October 1. It must be mentioned that ever since Blue Dart acquired cargo planes, now three in total, the company is planning to emerge as a regional player by linking India with Bangkok, Kaulalumpur, Singapore, Colombo, Dhaka and Dubai.
"Blue Dart's future expansion plans into the South Asian markets are independent of any dependence on FedEx. Blue Dart shall continue to leverage its huge domestic customer base to get international business," Mirchandani said.
Blue Dart has tied-up with Jelco Express Co ever since its inception in 1983. However in 1984, Jelco was globally acquired by FedEx resulting in latter becoming Blue Dart's partner.
