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Franchising and outsourcing could have a
role to play in the future development of international deferred or
day-definite express delivery services.
Such operations, which could be developed by leading postal organisations
among others, might prove very competitive with services offered by
integrators employing their own large-scale networks and fixed assets.
That, at least, was the argument put forward by a leading express and
postal industry figure at last week’s (May 14/15) annual World Mail &
Express Europe Conference in Amsterdam, the Netherlands, organised by
UK-based Triangle Management Services.
Ulf Dahlsten, former president and chief executive officer of Posten
Sverige (Sweden Post), suggested the 'economy' sector of the international
express market - that involving day-definite rather than sameday/overnight
time-definite deliveries - still offered substantial potential for growth
over the next few years.
Like domestic express operations in North America and Europe, he said,
that sector of the international express market would grow faster than the
now mature premium service business. International traffic would
increasingly be switched from time-definite sameday/nextday services to
more economically-priced day-definite options. That trend could leave
integrators vulnerable to competition because of their high, fixed costs.
'Is there maybe still an opportunity in this economy express market for a
concept, a new competitor perhaps, which could build on the franchise
idea,' queried Dahlsten.
In that context, he pointed out, there were still independent local and
regional parcel companies around, together with some independent postal
administrations currently undergoing transformation, which could be
participants. At the same time, some airlines were struggling to fill
their aircraft holds which meant there was cargo capacity available.
'From a purely financial point of view, there ought to be an opportunity
in the economy express market, or whatever it is called, for a franchise
concept which could be very competitive with the existing integrators,
however large and unbeatable they appear to be,' he concluded.
Another speaker at the World Mail & Express Europe Conference agreed the
express industry should consider the potential for franchising some
operations but also suggested there were practical problems associated
with the concept.
'The franchising idea is a very sound one in theory. However, the
practical consequences are the challenge,' stated Simon Clayton, vice
chairman and chief financial officer of integrator DHL.
Elaborating on that last point, he said DHL, for instance, had started
moving back from working with agents and partners on a quasi-franchise
basis in some parts of the world because it needed more control on the
ground. In certain Asia countries, for example, the companies DHL had been
working with had lacked the investment capacity to keep pace with the
integrator’s rapidly-growing customer and business demands.
'Undoubtedly, there are areas of activity where we can partner but I think
the global dynamics of the express business mean a pure franchise
philosophy is a quite difficult one to apply,' added Clayton.
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