TNT, one of the world's largest express delivery service providers headquartered in the Netherlands, has signed a strategic partnership agreement to provide express services in India with Hongkong Post, the postal service provider in Hong Kong. The companies are also likely to tap into the emerging markets in the Middle East in the next couple of years.
The companies will together provide the Speedpost FreightPlus service, which enables Hongkong Post to deliver items to India in two to three days instead of five to six days as in the past. Shipments can also be handled in multiple pieces under one consignment, leading to greater flexibility.
Under the partnership agreement, Hongkong Post will provide collection and customer services for items to be delivered overseas by express. TNT will collect the items to be delivered to India. The items would be delivered through the Indian logistics company Speedage, which has an established network in India and was acquired by TNT in 2006. Hongkong Post will provide customer service support and manage item tracking and tracing requests.
Ambrose Linn, managing director of TNT Express Worldwide (HK), said the collaboration of the two companies will lead to a win-win situation. He said Hongkong Post has strengths in the express delivery retail market and TNT has established delivery networks internationally. "The companies have complementary strengths," he said. The postmaster general of Hongkong Post, Tam Wing-pong, said Hongkong Post has a good retail network and can complement the services provided by TNT.
Linn said TNT has undergone a number of merger and acquisition activities in recent years, with the acquisition of Speedage a case in point. He said the company has developed both the sea freight and air freight networks in India.
Linn said India has great potential for the development of the express service market. "India is the world's second largest factory following China. The economy is developing fast," he said.
Tam said India has a large middle class base and there are numerous business opportunities. "The competition [in the express service market] in some places is very keen, but for other places, there is still huge potential [for development]. And India is one of the places with potential," he said.
"Outbound shipments from Hong Kong to India are growing significantly," Linn said. He said cargo from eastern, northern and southern China are shipped to India via Hong Kong and this trend will continue, leading to more and more consignments out from Hong Kong to India in the coming years.
Hong Kong export to India in the first six months of 2007 was 18,421 tonnes, and increased by 40.5 percent compared with the same period last year. Imports from India for the same period was 6,741 tonnes, representing an increase of 142.1 percent compared with last year. Value of re-exports from India also jumped 33.9 percent in the first six months compared with last year to US$1.4 billion.
Linn said if the business in India develops successfully, TNT will continue to explore the emerging markets. He said the company will take a year or two to develop the India market, and will explore the Middle East market once the business in India matures. "We are confident that the business in India will go well," he said.
Linn said the company is also targeting markets in South America, South Africa, Eastern Europe and Russia. He said TNT has a strong network in Eastern Europe and the company sees huge potential in this area.
"Some companies and government departments are already considering setting up or have set up branches in Eastern Europe. Eastern Europe has the potential to develop into another world factory," he said.
TNT and Hongkong Post is also considering co-branding initiatives to provide time-definite and premium services for existing customers. |
