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Market overview

Express is part of the global transportation and distribution industry and is dedicated to providing delivery solutions to its customers.

General

Express operates in what is commonly referred to as the CEP market (Courier-Express-Parcels), which is usually segmented along two dimensions: speed or time-certainty, and weight. Within the first dimension, customers have different requirements in terms of speed and guarantees for their consignments, ranging from same-day and time-definite to day-uncertain deliveries. Within the second dimension the weight, shapes and sizes of consignments differ. They range from small and light goods (e.g. documents), to large and heavy goods.

These varied requirements use different delivery networks and are served by different operators (see graphic below). These range from expeditious and time-sensitive (air and road) express networks operated by integrators to less expedited sea carriers. Freight forwarders operate networks that are partially ‘virtual’, using block space on other operators’ planes, ships and (to a lesser extent) trucks, and their own depots and sites in harbours and at airports. Couriers focus on same-day and (intercontinental) next-day deliveries with a focus on light weights.

Express is a so-called ‘integrator’, covering most of the market segments, excluding mail services and transport of bulk goods (see graphic below). The other global integrators are UPS, FedEx and DHL.

Couriers

  Up to 1kg Documents Up to 10kg Parcels Up to 250kg Pallets Up to 1,000kg Full loads Up to 20,000kg Bulk
Same–day Couriers Couriers      
Time–certain          
Day–certain
1–3 days
Mail 1st class
Mail other
       
Day–certain
3–5 days
Mail 1st class
Mail other
Parcel operators      
Day–uncertain Mail 1st class
Mail other
Parcel operators Trucking companies Trucking companies
Freight forwarders
Trucking companies
Sea carriers

Parcel operators are often related to postal incumbents and include TNT Post Pakketservice (Mail), GLS (Royal Mail) and GeoPost/DPD (La Poste). In recent years, these players have developed partner-based European networks and upgraded their offerings to day-definite products. Local/regional LTL (Less than Truck Load)/freight players including Schenker (Deutsche Bahn), DHL Global Forwarding/Freight (Deutsche Post), DSV, Dachser and Geodis (SNCF) are also upgrading their services and building up their European networks, though to a lesser extent. This is in line with the general industry trend of blurring boundaries between services.

Geographic markets1

In Europe & MEA (Middle East and Africa), the European CEP market had an estimated total size of €56 billion in 2009. Express is traditionally mainly active in a more ‘narrow’ segment of the market encompassing time-certain, next-day and fastest by air or road day-certain delivery for business-to-business (B2B) consignments, transported through a scheduled network with door-to-door track-and-trace of individual items /consignments.

1
Source market sizes and shares in this section: Competitor Model (internal Express database built on various external sources), Based on the latest available data, data for 2010 not yet available

The thus defined domestic and intra-European ‘B2B Express’ market is estimated at approximately €19 billion in revenues in 2009. In this segment, Express has a market share of 17%, followed by DHL (15%), UPS (9%) and La Poste (8%).

Customers are increasingly seeking a more varied express product and service offering. Express is expanding to a larger addressable market, which includes the parcel market not normally classified as express (standard parcels), business-to-consumers (B2C) and intercontinental shipments. Express estimated the size of this addressable market in Europe at around €38 billion in 2009.

In Europe, Express operates a broad road network connecting all 38 European countries through 16 road hubs daily, with an additional leg to Morocco. Express’ European Air Network connects 65 destinations through a fleet of 50 aircraft, including four Boeing 747 freighters. In 2010, TNT Airways managed to obtain traffic rights for flights to Moscow. The Moscow connection allows for an integrated service with superior cut-off times, which is especially attractive to the life sciences sector.

In addition to its international operations, Express is one of the main players in the domestic express services market, particularly in the United Kingdom, France, and Italy. The announced intention to take a 50% stake in the French B2C standard parcels company, Adrexo Colis, will further benefit Express’ domestic position.

In the Middle East, Express operates an intra-regional road network in addition to its air-based services. In Africa, Express has fully owned operations in a few key countries and serves most of the continent through partnerships and agents. Given Africa’s fast growing population and demand for transportation services, as well as strong growth in trade and capital flows with China and India, Express plans to continue to strengthen and expand its domestic position and increase its international and intercontinental connectivity.

The express market in the Asia-Pacific region was estimated at €9 billion in 2009 (excluding Japan) and is expected to grow rapidly in the coming years.

In China, Express has an advantageous position through:

  • providing unmatched reliability and service for a wide range of customers, including multinationals requiring pan-China delivery solutions,
  • a wide delivery network covering the whole of China,
  • a select and targeted product offering catering for parcels and freight in both day-definite and day-uncertain deliveries, and
  • strong service capabilities, including over 1,500 depots, five international gateways and backed by four Boeing 747 freighters.

Hoau (China) is one of the main players in the Chinese domestic market and operates the largest private road transportation network, with more than 1,500 hubs and depots across China. Hoau continues to roll out its day-certain road delivery service, which grew significantly compared with 2009.

The international express activities in Asia-Pacific offer a broad choice of services throughout this large and diverse region. In the high-tech sector, Express has an eminent position in express transportation from Asia-Pacific to Europe. Express now flies freighters daily between the regions, providing customers with secure and reliable services. In terms of overall intercontinental flows out of Asia-Pacific, Express ranks fourth with 12% behind DHL (31%), FedEx (25%) and UPS (16%).

Express also has a beneficial position in intra-regional road express services in Asia. The TNT Asia Road Network (ARN) connects over 125 cities and provides world-class operational performance and security that allows the ARN to provide an alternative to air and sea services.

In India, Express has established a solid domestic base and grew its domestic and international business by more than 20% in 2010. In India, Express currently operates a network that spans 200 key locations with seven major hubs.

In the Pacific, Express has retained its robust position in its country of origin, Australia, where it is the second largest player in the B2B express market with 19% market share. The express market in Australia is predominantly domestic, accounting for almost 90% of the more than €2 billion Australian B2B express market in 2009.

The Americas encompass the mature market of North America and the high-growth South American markets. The South American markets, estimated at €3 billion in 2009, offer ample opportunity for consolidation and growth. Express has established a first mover position in the domestic express business in the largest emerging economies of this fast-growing continent, through the acquisition of Mercurio and Expresso Araçatuba in Brazil (respectively in 2007 and 2009) and LIT Cargo in Chile (2009). Leveraging the presence it also has in Brazil, Argentina, and Chile, Express operates a first-to-market intra-regional road network connecting these markets.

Express is a significant express player on the South American continent with 186 depots and approximately 3,000 vehicles, 10,000 employees and 14 million consignments transported in South America in 2009.

The North American market is dominated by UPS and FedEx. For more than 25 years, Express USA has successfully managed a parcel distribution network using commercial airlines and third-party agents. Express’ North American presence provides full service capabilities to its clients on other continents. Currently, Express operates a daily dedicated flight from its express hub in Liège, Belgium to New York. In 2009, Express entered into a partnership with Con-way Freight for the delivery of heavy freight. Con-way Freight is also linked to Express’ European air and road networks. The partnership offers cost-effective and high-quality express freight services between Europe and the United States.