Globalisation, the internet, customer service and innovation are the key challenges facing the CEPindustry, according to speakers at the Courier and Parcel Logistics Summit held in Barcelona this
week.Expanding international networks, how to leverage leading-edge technology and respond toincreasingly global sourcing, production and supply now characterised the sector at a key juncturein its development, a lively first session of the summit on Tuesday heard.
Speaker Colum Joyce, CEO of KBOR Research, spelling out the opportunities and challenges theindustry faced, provocatively said express operators seemed “self-satisfied” with their businessmodels. “The industry faces unprecedented challenges and unprecedented opportunities. Globalisationwouldn’t exist without the express industry. As it has matured, though, it has decreased inflexibility, leading to commoditization (which) has led to poor profits, falling differentiationand reduced innovation,” Joyce said.
During a panel discussion, UPS strategy vice-president, Frank Sportolari, rejected the notionthat the express industry was not responding to customer needs. “I would not say we areself-satisfied. What we have is satisfied customers. We are creating demand, responding to demandand creating global commerce.” FedEx vice-president for central and eastern Europe operations,Michael Mühlberger, agreed with his UPS rival. “Whenever there is a need, we will react to it,” hesaid.
Peter van Laarhoven, group director strategy at TNT Express, began the session, saying thecarrier was looking to expand in eastern Europe, Turkey and South Africa. On Russia, he was morehesitant. “It’s a very big but very difficult market,” van Laarhoven told delegates. TNT’s keyfocus was on expanding its networks to capitalise upon growth opportunities and optimising itscapital structure to provide sufficient funding for a combination of acquisitions, dividends andshare buy backs.
Sportolani outlined UPS’ growth strategy, the key strands of which were to build up itsleadership position in the US and continue international expansion, particularly in Europe. UPSwould increasingly provide comprehensive supply chain solutions, leverage leading-edge technologyand pursue further strategic acquisitions.
Mühlberger said the industry was faced with several large trends, one of which was the way inwhich the value of goods was increasing. Although air cargo is only 3% of worldwide freight inweight terms, it represents 40% of the total value. Mühlberger said that countries had to providegreater access to goods, services and information if the international express market was to growas rapidly as forecast. In an Access study by FedEx, Hong Kong and Singapore were the most opentrading countries, while the US languished in 12th place, he pointed out.
GeoPost board member Hans Fluri said the DPD parcels network was now No.2 in Europe, behindonly DHL, with some EUR 3 billion in sales revenues. The company’s classic international servicewas growing at 20% per year and, since DPD has no requirement to buy aircraft, it was able toprovide a Germany-China service at 30-40% cheaper than the big integrators, he said. The CEPindustry was changing significantly, Fluri told participants. “We have to live up to theexpectations and desires of our customers. Worldwide sourcing, producing and supply raise demandfor international standard and express shipments,” he stressed.
