Finnish operators to meet new competition
Established operators will meet a new wave of competition from the smaller players of the new EU members offering cheap rates
The accession of new countries to the EU brings new business opportunities. But express operator HRX believes it will suffer from new, small companies offering point-to-point services at minimal rates when customs documentation is no longer required, especially between Finland and Estonia.
MD Jari Nurminen thinks HRX will still retain a good market share because of its broad footprint across the region, however. “Those new players will not be able to build networks so fast in other countries, ” he says.
HRX was launched in 1992, just as the three Baltic republics gained independence, and now is active in those states, Sweden, Poland and Russia as well as its home market in Finland. Growth is currently running at 15% – “but that’s slowing now because we are bigger in size, and we are an expensive option. Clients look for value, ” admits Nurminen.
The strength of Finland’s ferry connections means that most shipments for the Baltic countries go out by truck. An urgent package for Riga, for example, can be picked up in Helsinki as late as 3pm and make an overnight sailing.
HRX can customs clear it and arrange delivery before 10am.
On paper, Finland to the Baltics accounts for around 2,500 parcels a month, but the real number is approximately double that, says Nurminen. “We sometimes make one customs clearance, then split to as many as 70 delivery locations.” The company uses only its own transport, and for inward shipments to Finland or domestic work offers sameday delivery within a 200300km radius of Helsinki.
The main competitor is TNT, but HRX claims to be double its rival’s size, and has a larger average shipment size at one pallet.
Clients include Volvo, Nokia, Sony and, curiously, Finnair. The airline may fly goods in from, say, Hong Kong to Helsinki, but if the final destination is Vilnius, it will put the shipment with HRX because its own aircraft are too small on the intraBaltic routes.
There is an all-air option to key locations such as Tallinn with integrators like DHL and TNT, which can make close-of-business collections of financial or legal documents in Helsinki and fly them over on their own freighters. HRX has cooperation agreements with operators such as Menlo, Airborne and DHL, but Nurminen is uncertain how long the latter arrangement will stay in place as the group restructures.
Of the EU candidate countries, he says: “The big question mark is over Poland.
There are so many people there – it could be amazing business if they get the country running properly.” The nature of HRX’s work will change for the new member states once their customs barriers come down, however. “We have 50 to 60 people doing paperwork that we won’t need in 2004. This is one reason why we want to develop Russia, ” Nurminen explains.
The company has a St Petersburg office and hopes to open one in Moscow, where it now buys delivery services.
Nurminen claims to have avoided queues at the Russian border without getting involved in “black money”, but admits: “We are just learning our way there – still learning about customs and how to get shipments through quickly. We would like to offer a fast daily service from next year, if possible.
