Ã¢â‚¬Å“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.Ã¢â‚¬Â
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 ExpressÃ¢â‚¬™ 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.
Ã¢â‚¬Å“However, both companies were able to gain significant ground on major freight forwarders in the supply chain service and freight markets, despite this market segment suffering more from the economic crisis than the small package/express market. DHL was able to win large contracts in the life science, fashion, industrial, high tech and automotive sectors, but saw overall revenues decline due to lower rates and fuel surcharges.Ã¢â‚¬Â
UPSÃ¢â‚¬™ freight volumes decreased by just two per cent, in sharp contrast with the industry overall, which showed a double-digit decline, indicating a large gain in market share for the company, Datamonitor said, adding that the recent opening of healthcare freighthandling facilities in Puerto Rico and the Netherlands underlines UPSÃ¢â‚¬™ strategy to strengthen its position further in this sector.
Datamonitor believes the structural changes that have taken place in the express industry in terms of geographic focus, distribution models and customer preferences will require the leading firms to reorganize their networks. This implies shifting the geographic focus to emerging markets (such as South America and the BRIC countries), and improving their road networks in order to cater for customers requiring alternative transport modes.
The rise of e-commerce has been another fundamental change in the distribution models used by express customers, which has prompted express firms to increase their home delivery distribution capabilities and exploit one of the few remaining growth engines of the express market, says Datamonitor logistics and express senior analyst Erik Van Baaren.
Ã¢â‚¬Å“The development of industryspecific solutions combined with a global integrated service is another way for express companies to counter the negative effects of the economic downturn which, despite showing signs of receding, does not appear to have entered a phase of recoveryyet.Ã¢â‚¬Â