Competition grows fiercer in courier service industry

Competition grows fiercer in courier service industry

JAKARTA (JP): Courier service competition is tougher than ever
in Asia and the Pacific as the robust economic growth over the
last few years has encouraged major firms to expand.

Phil McConnell, a director of the Asia-Pacific Synergy
Planning Group, told The Jakarta Post that the better economies
in most of the Asian and Pacific countries have created the
fiercest competition ever among the courier service companies.

The Asia-Pacific Synergy is a giant international cross-border
integrator for the DHL Worldwide Express courier service company.

McConnell said that to anticipate the competitive sphere, DHL
has established cooperation with Asia's major courier companies
and set up a logistics center in Singapore.

DHL, which has cooperated with PT Birotika Semesta of
Indonesia since 1982, claims to have partnerships in over 30
countries in the region. Under Birotika's management, DHL
operates 56 branch offices throughout Indonesia.

Despite the increasingly stiff competition, Paul Moorhouse,
chief executive officer for the Asia-Pacific and the Middle East
for TNT Express Worldwide is upbeat about the prospects for
expansion of services in the region.

"The economic boom in the region, including Indonesia, is a
good vehicle to support our intensified services to its
countries, which contribute some 24 percent to our total annual
turnover," he said here on Thursday.

The Amsterdam-based TNT, which has embraced the local courier
firm, PT Skypak International, in a joint operation since 1979,
reported that its total turnover in worldwide services steadily
increased to US$1.5 billion in 1992-1993 from $1.06 billion in
1991-1992 and $934 million in 1990-1991.

"Much brighter economies in the region will certainly give us
an option to improve our services in the future," he said.

This month, for example, TNT plans to operate two new
airplanes in the region and another two in December. TNT now has
three planes serving the region.

New products

Both Moorhouse and McConnell concurred that their newly
introduced service products are part of their firms' commitments
to improving services in the region.

TNT and its partner Skypak International launched the Asian
Air Express Network, which offers overnight freighter service
from Jakarta to Singapore, Seoul and Hong Kong and return, on
Thursday.

Skypak International's president, Soediono Somantri, told
reporters that TNT last year launched a similar network for
serving Jakarta, Manila and Taipei with an investment of $50
million.

"With the new product, we can guarantee that documents,
parcels and cargoes will be delivered within 24 hours in the
Asian countries," he said.

He claimed that TNT offers lower prices for its services than
any of its competitors in the country.

TNT, which is owned by TNT Ltd. of Australia and GD Net BV, a
consortium of the post offices of Germany, France, Sweden, the
Netherlands and Canada, plans to introduce the third phase of its
network this year for serving Jakarta, Bangkok, Kuala Lumpur and
Shanghai.

Money back

DHL which has operated in the country for more than 25 years,
offers a strong challenge with a 100-percent guarantee to its
customers if deliveries take more than overnight. "We guarantee
your money back if your documents or goods do not arrive
tomorrow," McConnell said on Wednesday.

TNT offers to refund only part of the fees if deliveries take
longer than 24 hours.

DHL has also launched the so-called Asia Overnight package,
which provides a door-to-door service from Jakarta to Kuala
Lumpur, Bangkok, Hong Kong, Tokyo, Singapore and Sydney.

Both DHL and TNT use Indonesia's local carriers, Garuda
Airlines, Merpati, Sempati Air, Mandala and Bouraq, for
deliveries in the country.

McConnell said that his company, which operates in 215
countries throughout the world, relied on its own air fleet of
130 airplanes for its services.

Because DHL is partly owned by Lufthansa and Japan Airlines
(JAL), it can also use 110 of JAL's airplanes and 203 aircraft
from Lufthansa for document and goods deliveries.

JAL and Lufthansa each holds a five-percent stake in DHL.

McConnell said DHL is capable of making around 50 million
shipments a year.

Moorhouse said his company operates its own 26 aircraft in
Europe. "There is no need for us to operate our own aircraft in
Asia and the Pacific," he said.

For the Asia-Pacific services, TNT is supported by the Pacific
East Asia Cargo Airlines, which is jointly owned by TNT and the
Philippine government. (fhp)