Demise of EG couriers brings some respite to fighting companies

The demise of EG couriers has bought respite to some companies fighting it out in a tough industry

The German courier industry has been shaken up by the recent failing of one of its better-regarded operators, EG Courier. The decision by the banks to foreclose on the operation has meant that a substantial volume of business has become available to its competitors that have so far survived the current turbulence in the market. Carsten Daniels, general manager international at GDSK, says he has seen business grow by 35-40 percent since the beginning of October, when EG was shut down.

He says: “We are very busy at the moment and it is due to the closure of EG. We are not doing anything differently, it is just that a part of our competition has gone.”

VOLUME BOOST

The boost in volumes has given the business a welcome shot in the arm, Daniels says, and GDSK has been able to handle it because of the volumes of business it used to deal with.

“We have handled far larger volumes in the past, so the infrastructure is already in place. We need some additional line haul capacity and extra customer service but on the IT side and the delivery side we are ready.”

GDSK saw around five million euros of business lost last year, with consolidation in the German mail and express business drawing a number of its best customers away for strategic rather than service or pricing issues. On the positive side, this has meant that the network it formerly operated has the scope to deal with the new volumes, Daniels says.

“We still need to go to every corner of Germany for our deliveries. Even if we have only two shipments, we still have to go, so the new work has greatly improved our cost efficiency, and hopefully will have a positive impact on the figures too,” he adds.

UK-based Norsk European Wholesale has also experienced growth in the German market, particularly on routes from the UK.

Sudha Nair, Norsk’s manager on the sector said that the operator was looking to increase its nightly airlift capacity between the UK and Germany. Currently chartering an aircraft that provides three tonnes of uplift, Nair said Norsk was seeking to provide a further two tonnes on a nightly basis by mid-November.

HEAVIER SERVICE

He says: “We are obviously currently expanding in terms of the German market, and have seen quite an increase in the volume of traffic on that route.”

Norsk plans to launch a heavier pallet service on the aircraft to cater for clients that are seeking heavier freight services on a next-day basis, in addition to more standard courier and express services, Nair says.

“Our customers are demanding this service, so we want to offer them the complete package.”

Daniels says that the downturn in the market of recent years has left a lot of operators weakened, making it difficult to market and generate new business to build up lost volumes, while the giant postal companies continue to integrate their networks, and the big integrated companies gain business.

“This is still a tough place to operate, but it is the same everywhere you go in Europe, it is getting harder for everybody. Companies are not sending as much by courier as they used to be, as budgets continue to be controlled, and businesses use postal services instead.”

However, Daniels is sympathetic toward EG’s situation, as it is a situation many companies currently operating in the sluggish German economy can relate to.

“We are still not really healthy, but we have just been lucky with this new business. It was EG’s bad luck that was our good luck in this situation. I think that after 21 years our banks are just more sympathetic,” he adds.