India market offers UPS, others crack at growth

Mumbai: Despite its woeful infrastructure, India offers express-delivery companies an English-speaking market of about 1. 1 billion people and 9 percent annual economic growth, with well-educated professionals and cities teeming with entrepreneurs trying to reach overseas markets.
United Parcel Service Inc., FedEx Corp., Deutsche Post AG’s DHL and TNT NV are all seeking to offset anemic growth on their home turf by exploiting opportunities in emerging markets. But UPS of Atlanta arrived in India after its three big rivals and must grapple with some problems they have already addressed or avoided.
Take the airport here, the main gateway for express shipments of packages and documents into and out of India. Each year, for two months at a stretch, it closes its main runway for repairs for two hours every afternoon. For these two awkward months, the world’s largest delivery company must make adjustments, such as shuffling its schedule so that flights from Hong Kong will arrive a few hours early and depart before each daily runway closure.
Then, the UPS planes have to detour to the Middle East emirate of Dubai for a stopover to Cologne, Germany. Each stopover in Dubai costs a few thousand dollars in landing fees. The runway repairs have much less of an impact on FedEx, DHL and TNT because their flights don’t coincide with the closures.
But all the players must deal with India’s inefficient skies. Connelly notes that his planes fly in circles “pretty much every day, waiting for permission to land” at Bombay, where encroaching slums have for years stymied efforts to enlarge the international airport.
Market-share data are hard to find, but DHL appears to be the leader among the four biggest international express-delivery companies here. Analysts say FedEx and TNT are vying for second and third places, while UPS ranks fourth.
In spite of the vagaries on the ground and in the air, UPS guarantees three daily delivery times in India, and each deliveryman handles an average of 40 packages a day — on par with his counterpart in China, where the infrastructure is much better, and only 20 percent fewer than UPS manages to deliver in the more orderly cities of Japan. Worldwide, UPS moves an average of 15 million packages a day.
26/01/08 Bruce Stanley/The Wall Street Journal/Arkansas Democrat Gazette, USA

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Categories: cargo Jan 2008, Foreign Jan 2008