COURIER MARKET 's DIFFERENT NEEDS LEAD TO DIFFERENT SOLUTIONS

  • 2007-09-19
  • Carl-Eric Lindstrom, Managing Director, DHL Baltics
I would like to correct a mistake from the Sept. 6 issue of The Baltic Times ["The Baltic Courier Market Labyrinth," page 10, TBT #572], where the incorrect DHL price for delivery of a 1 kg express shipment from Riga to Vilnius was published. The correct price is 46,01 euros, which is in line with the competition.
Looking at the courier services market in the Baltics it has to be understood that just like in any business, there are different market segments that the companies are operating in. For example, although both are operating in the car market, the car dealer selling economy class Dacias does not compete with another car dealer selling brand new BMWs and the success of Dacia sellers does not necessarily mean that the car market overall is booming or that BMW sales must be on the rise.

The same applies to the courier or express market 's there are clearly separated domestic and international express markets. The domestic market in the Baltics is easy to enter and fragmented 's most of the companies operate in one of the Baltic countries only. The small domestic players usually do not provide full international service, they just do what customers in their market segment expect: to provide cost-effective point-to-point local courier service within a city or between cities in one country.

The international express market segment looks similar all over the world 's four main international providers of systemized international express services are active worldwide 's DHL, TNT, UPS and FedEx. The first three have already been present here for many years, with DHL being the market leader in Europe and in Baltics, also offering the widest range of services outside of the express segment. DHL's service includes full capabilities in air, ocean and road freight transportation and freight forwarding, as well as contract logistics (outsourcing of complex warehousing solutions) and supply chain management solutions across the Baltics.
As part of globalization and increased international trading, the importance of international express companies is predicted to increase significantly on the global scale, and the estimation of market growth in the Baltics is around 15-20%.

The availability of competitive express services, including the capability to deliver overnight shipments before 12:00, are essential for the Baltic economies to ensure reliable and fast worldwide deliveries of confidential contracts, samples, marketing materials, spare parts, prototypes and direct distribution concepts. In this context end-to-end visibility of shipments through reliable tracking systems and data management is at least as important as the availability of the international transportation networks, which form high entry barriers for new entrants to the international express market.

Companies operating in international and domestic express markets differ significantly and both have their own advantages that benefit success in their respective market segments. The companies operating in domestic and international courier market segments cannot be compared directly, just like it does not make sense to compare Dacia with BMW 's they are both good cars, but designed for their own market segment with different needs.
 

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