DHL 1999 Annual Report Download - page 19

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All in all, market liberalization and the spread of the
Internet are expected to steadily boost transnational let-
ter item volumes in all segments of the letter mail mar-
ket. Mail service providers that expand their entire
range of services into a single-source,international prod-
uct line will be able to take advantage of this growth
opportunity.
EXPRESS
The European express market - in other words,the mar-
ket for courier, express and parcel items – is also under-
going dramatic change. The e-Commerce revolution
and the business customer’s increasing focus on inter-
nationalization strategies are accelerating the trend
toward single items and growing trade in goods. The
growth rates achieved in international commerce, the
B2B express segment and the B2C segment could lead
to a doubling of the market in this area within the next
five to seven years.
A powerful trend toward consolidation and concentra-
tion has developed to handle these growing volumes
and meet the steadily greater demands for speed and
reliability. Customers in the Single European Market
demand reliable delivery times, a uniform price system
and a standardized product mix.An international par-
cel service that has to make use of various networks in
various countries, each with their own complicated
price and clearing systems,cannot meet these demands.
In our view, competitively priced solutions that make
use of a uniform network and come from one single
source offer particularly important advantages for
customers who are very active in the international
arena.Large-scale operators with efficient,cross-border
delivery networks will be able to satisfy these market
requirements in Europe. Such companies are the only
ones with enough volume to operate networks which
involve large overhead costs.
This consolidation process is already well advanced in
the United States.On the other hand,the European par-
cel and express mail market is still extremely fragmen-
ted. Together, the six largest providers (Deutsche Post
World Net, DHL, La Poste/DPD, TPG/TNT, UPS, UK
Post Office/General Parcel) account for less than 50 per-
cent of the entire market.
Deutsche Post is No.1 in the European parcel and
express market.
The European parcel and express market
By contrast, the U.S. Postal Service, UPS and FedEx
dominate more than 80 percent of the U.S. parcel and
express market (air and ground traffic). While the
ground parcel markets in Germany and Europe are
fiercely competitive, the U.S. ground parcel market is
dominated by UPS, which accounts for a 75-percent
market share.
Market shares in the U.S. ground parcel market
in 1998
18
Percentage market shares (1998)
Others
53.5 %
TPG/TNT 6.4%
UPS 6.2 %
The Post Office/GP 3.6 %
Deutsche Post 13.4 %
DHL 6.7 %
La Poste/DPD 10.2 %
Overall market: 3.3 bn parcels
Others
4.9 %
USPS
9.1 %
FedEx
11.0 %
UPS
75.0 %
Sources: MarketLine study – “European Courier and Express 1998
and 1999”, MarketLine International, 16 Connaught St., London W2
2AF, U.K.; TellSell study – “Länder Potentialstudien”, commissioned
by DPEE; various press releases and articles; European
Logistics Company/ Benchmarking & Profiles, MarketLine Inter-
national; internal sources and McKinsey
Source: The Colography Group, Inc.
http://w ww.colography.com/press/prLTLSlow.htm