Tag: Courier/Express/Parcels

FedEx revives talks to buy rival TNT

Posted by | Jul 12, 2008 | |

FedEx is in preliminary talks to acquire TNT, its smaller Dutch rival, in a deal that would bolster the package-delivery company’s parcel network throughout Europe.

While FedEx and United Parcel Service have coveted TNT’s parcel business, they have been reluctant to take on the Dutch company’s slower-growing postal division.

UPS’s interest in snapping up TNT has waned in the past decade as it built its own European delivery network. The company recently forged closer ties to TNT’s main rival, DHL, through its agreement to ferry the Deutsche Post unit’s packages between North American cities.

Deutsche’s GBP 3.7bn acquisition of Exel, the UK-based logistics group, in 2005 has been the sector’s biggest deal to date.

On Friday, FedEx’s market capitalisation was USD 22.8bn (GBP 11.5bn), while TNT stood at USD 11.3bn.

TNT, which primarily operates in Europe and North America, divides its business into two segments: express and mail.

FedEx remains the largest player in the market it pioneered: express delivery. While its biggest operations remain in the US, it has sought to expand overseas.

In Europe, the company aims to build out both its intra-continental network while establishing a local presence in discrete countries. FedEx bought ANC in 2006 to strengthen its domestic express-delivery business in the UK.

In June, FedEx posted its first quarterly loss in 11 years and projected earnings that fall short of analysts’ estimates because of fuel costs and declining demand.

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TNT dismisses FedEX buy-out rumour

Posted by | Jul 12, 2008 | |

Rumour that FedEX Corp could buy out Dutch-owned TNT, reported in the Financial Times, has been dismissed as speculation by TNT.

Although the idea isn’t a new one, the potential for a complete or partial buyout could be greater than ever as TNT, like many postal operators across Europe, feels the pinch of higher operating costs coupled with economic slow-down. It could be an attractive proposition for FedEX as the acquisition would strengthen FedEX’s presence in Europe.

For FedEX too, these are also difficult times, with the U.S. in the midst of a recession, but merging the two companies would enable both to ride out the present economic decline and put added pressure on Germany’s Deutsche Post. FedEX has already announced its first quarterly loss in over a decade.

If there is any basis to the rumour, it could increase FedEx’s European parcel-delivery sales by as much as 144 percent and cause other European operators to look again at further mergers.

However, TNT posted a message on its website which read:

“With reference to various news articles today in which TNT was mentioned, TNT wishes to reiterate its policy not to comment on such speculation and market rumours.”

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FedEx to open Asia-Pacific Hub in Guangzhou

Posted by | Jul 11, 2008 | |

FedEx Corporation says its Asia-Pacific transport center is to complete construction in the Guangzhou Baiyun Airport at the end of July 2008, citing a report.

Covering a land area of about 1.634 million square meters east aside of the airports eastern runway, the hub is FedEx’s biggest one in Asia-Pacific, composed of a service zone and a flight zone. And the service zone has passed regulatory review to start business on July 9.

It is equipped with an emergency electricity generating system, capable of resuming power supply eight to 14 seconds after power cut. Its distribution center is designed with first-class lightning protection, and is able to resist eight to whole gale as well as strong earthquake.

The transport base is expected to have a daily throughput of 1,823 tons, including 179,000 express parcels. And local officials hope that it would lure more investors into Guangdong Province.

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TNT adjusting to realities of on-line B2C deliveries

Posted by | Jul 11, 2008 | |

TNT’s operation research systems are concentrated on five hubs in India- Nagpur, Kolkata, Mahipalpur (near Delhi), Neelmangala (near Bangalore) and Sinnar (near Nashik).

Though it has ten depots in the USA for trans-Atlantic consignments, TNT has stuck to a policy of not competing with established players like UPS and FedEx in the American market. Instead, it in concentrating on growth in the emerging markets. “In select emerging markets, we aim to be number one,” says TNT’s group managing director Marie-Christine Lombard.

The Dutch company has been expanding its operations in emerging markets through a strategy of mergers and acquisitions. In Brazil, it has acquired Mercurio, in Kenya, it has bought Aircare and in China, it has taken a 100 pct stake in Hoau, the country’s largest road transport company. In India, TNT bought over the Hyderabad based Speedage Express Cargo two years ago, thereby acquiring 514 depots, 26 transit hubs and 730 vehicles.

“In countries the size of India and China, starting a greenfield operation is very difficult,” says Lombard. “At the same time, there was no overlap between the operations of TNT and acquired companies like Speedage and Hoau. We provided international connectivity to their domestic operations.”

Lombard also sees new opportunities for the company in Europe’s booming e-markets, where logistics is intrinsic. The UK and Germany logged 22 billion euros worth of on-line sales each last year, with books, movies, clothing being the main products. The French have been slower to get on-line , but they’re gradually catching up.

Traditionally a B2B player, TNT is adjusting to the realities of on-line B2C deliveries.

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TNT delivers DVDs across India

Posted by | Jul 11, 2008 | |

TNT has partnered with the online DVD rentals and sales company Movie Mart in India to distribute DVDs countrywide using its integrated air and roads network.

Under the agreement, TNT is expected make the services of Delhi-based Movie Mart available in 300 cities and towns it is operating in.

Movie Mart, which claims to be India’s first online DVD rentals company, eyes a 30% of the DVD rentals market within five years. It plans to set up its own stores in Mumbai, Bangalore, Chennai and Kolkata in order to provide its DVD rental service on a national level.

“We now make sure our DVD’s are delivered safely and on-time using the TNT’s integrated air and roads network. We aim at becoming a specialised website into DVD rental and selling, online downloads, home video rights and movie production. Currently, we deliver to an average of 8,000 customers in Delhi on a daily basis,” said Movie Mart CEO, Rahul Mansharmani. “Movie Mart expects about one million subscribers all over India in next 3 to 5 years time,” he added.

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