Breaking down of customs border to challenge the courier market in 2007

Two of the main players on the domestic courier market, DHL and TNT consider their business success after Romania’s accession to the EU will be partly subjected to the manner in which they will be able to cope with the breaking down of customs border and to adapt to new market conditions. Moreover, the domestic market is expected to go up in 2007 while supported by general economic growth fueled by expected larger investments in the majority of economic sectors. Prior to accession both companies poured millions of euro in developing their transport fleets and increasing the quality of their services. Both TNT and DHL declared themselves content with the financial results reported in 2006. We asked companies’ commercial managers for more details on the 2006 achievements and on the challenges ahead.

How did your business evolve in 2006?

Bogdan Obretin Commercial Manager DHL Romania

“2006 for DHL confirms to have been a good year in terms of development and achievements on the Romanian market, where DHL has preserved its position of leading express courier and logistics provider and has also been awarded Superbrand status in the first ranking of this kind in Romania. We still lead the market by differentiating through the quality of service we offer, the professionalism of our people. DHL was the first express operator to enter the Romanian market and that experience has helped us keep ahead of the pack. In a dynamic market entrepreneurialism is key to driving our business forward. We feel we have adopted the correct strategy early enough to tap into the right growth areas at the right time.

Looking firstly at the international express market, generating over 70 per cent of the revenue, DHL leads the Romanian market with a 45 per cent share, according to the most recent market research made in 2005 by A.T. Kearney. With regards to the domestic express market, DHL is growing rapidly, being on the right track to closely follow the two local largest players. Key drivers for growth versus 2005 have been the expanding of local product portfolio, the investments in infrastructure and market penetration on small and medium sized customers. Also, an important contribution to our development during this year has been DHL’s responsiveness to local industry development and changes by implementing dedicated solutions for the fast growing automotive and high tech sectors.

Apart of international express services, good development has been also registered for Domestic service, following local investments of over EUR 1 M in new service points within the country, vehicles, people and sorting and distribution terminals.”

Bogdan Zafiu, Country Sales & Marketing Manager TNT Romania

“Considering that, worldwide, TNT Express is one of the global leading business-to-business express delivery companies, we have set the same ambitious goals to be achieved on the local market. TNT’s positioning as leader of the market during the last five years has been generated by company’s year on year growth. Also, as the Romanian express delivery market continues to have a high dynamic (around 25 – 30 per cent), our business objectives exceed this growth, in terms of profitability.

Moreover, the integration is a very important moment for our country and especially for the companies involved in the international commerce and transport. We do see EU accession as a great opportunity for Romania from all perspectives – social, economic and political.

That is why during the period previous to country integration, we decided to invest with the utmost perseverance in our resources, in order to be able to offer the largest capacities for air and road transport and the best transit times time on the Romanian market. Through TNT Express network air and road, every company will be able to “reach” any location all over the world, relying on TNT transport expertise, to increase efficiency and efficacy in doing business. In Romania, TNT Express provides a unique combination of on-demand time sensitive door-to-door national and international express delivery services. We are the only carrier providing a comprehensive choice of Europe-wide air and fastest by road door-to-door international express delivery services. Based on this unique range of services we are offering at this moment, we consider that in 2006 the engine of our company growth has proved again to be our concept of “one stop shop”, created to adapt to the needs of our customers.

In 2006 we successfully developed a few complex projects, designed to maintain our leadership on the market, as well as our competitive advantages, respectively launching the TNT Contact Centre - a unique customer relationship management department, offering 24/7 expert assistance -, and investing in our infrastructure, to upgrade the transport capacities. Our network covers the entire country’s territory by daily regular line hauls leaving to and from our over 20 regional offices, so our customers will be served in the best way. 2006 continued to be an excellent year, generating a strong growing rate and top performances, both from revenue and operating development perspective.”

What are your expectations with regard to 2007?

Bogdan Obretin Commercial Manager DHL Romania

“Naturally the impact of EU accession will be positive as Romania is expected to accommodate larger investments after this event, therefore our company’s future plans aim at ongoing market share growth in all segments.

For our industry the big change will be the breaking down of the customs borders. This will open up more sophisticated intra European road networks. Air transportation will remain but we will see a gradual shift to road for less time sensitive shipments. DHL has one of the largest intra European road networks and we shall be exploiting this competitive advantage.

We would expect domestic overtaking international in terms of market size. However margins in this segment could come under pressure, due to local providers increased competition. Also, logistics sector is expected to play a major role for Romania after EU accession, considering Romania positioning at the border of EU and having direct access to the Black Sea.

We are prepared to face these challenges and trust that our customers will further appreciate our adapted solutions to new market needs and environment.”

Bogdan Zafiu, Country Sales & Marketing Manager TNT Romania

“TNT Romania offers the widest range of services on the Romanian market and is able to offer tailor-made transport solution for any customer, regardless size and type of shipment. At the same time, we take pride in having very good care of all our customers, by customer’s direct approach of our well trained and represented sales force, and also by the high level of international expertise of our Contact Centre. All these strong points will become even more important in the next months, as the simplified custom procedures will connect the Romanian market with the international business environment. For sure, all companies will be open to trading actions and we have the skills, performance and network to help our customers in order to find the best possible transport solution.”

Source: nineoclock.ro