Leading integrators need to reorganise networks: Datamonitor

Leading integrators DHL, TNT, FedEx and UPS need to reorganise their networks as a result of structural changes in the industry according to consulting firm Datamonitor. Despite severe cost cutting programmes, the four major integrators have all recorded a major drop in profi ts in the last quarter, largely due to significantly lower volumes as […]


DHL economic recovery emerging markets FedEx TNT UPS


Leading integrators DHL, TNT, FedEx and UPS need to reorganise their networks as a result of structural changes in the industry according to consulting firm Datamonitor. Despite severe cost cutting programmes, the four major integrators have all recorded a major drop in profi ts in the last quarter, largely due to significantly lower volumes as well as customers opting for cheaper alternatives, Datamonitor noted in anew report.

“However, both DHL and UPS companies have gained some signifi cant ground on their competitors also affected by the current recessionary climate, and are remaining cautiously optimistic despite there being no clear date for an economic recovery just yet.”

In its report, Datamonitor said that since the last set of poor results was announced by FedEx in July, TNT in its Q2 results presentation announced a double digit decline in revenues in its express division despite volume decline bottoming out in the last few months. Similarly DHL Express’ revenues fell by 28.6 per cent in Q2; even after discounting the effect of its exit from the US domestic market, organic revenues fell by more than 15 per cent. UPS saw a similar decline in revenues, as lower volumes and a lower yield per item (as a result of lower fuel surcharges), customers sending lighter packages, currency effects and a negative productmix as customers opt for cheaper alternatives, all impacted both its US domestic and international businesses, the consultancy said.