Actividad En Ingles

|

Global express-package companies
And then there were three?

Plans to merge two of the world’s big four express-package firms have raised competition worries
Sep 1st 2012 | ATLANTA AND LEIPZIG | from the print edition
•
•
[pic]

THEY work while we sleep, unloading planes and lorries, feeding packages and letters into huge sorting machines, and reloading them for rapid delivery tothe four corners of the earth. Each item is coded and tracked on its dizzying journey through many hands. Four companies dominate this express-package business: FedEx and UPS, based in America, and DHL and TNT Express in Europe. They own and run airlines, and fleets of lorries and vans; they operate hubs at airports where the sorting is done.

TNT is the outsider in the group, being smaller andmore competitive on price. It is the market leader in two big European countries, Britain and Italy, reckons Transport Intelligence, a research firm. FedEx and UPS are a near-duopoly in the United States. DHL has 32% of the German market, around 40% in Asia and over 50% in central Europe, the Middle East and Africa.

In this section
• Swipe, pinch and zoom to the courtroom
• Biting back atApple
• Stuck in fifth gear
• Second life
• Suspiciously quiet
• »And then there were three?
• Those bloody Scandinavians
Reprints
[pic]

Related topics
• United States

• Fedex

• Couriers and delivery services

• United Parcel Service of America Inc.

• Europe

That may already appear a worrying level of concentration, with a risk of tacitcollusion or at least “soft competition” on price. So reducing the number of “global integrators”—as they are called in the trade—from four to three might seem a step in the wrong direction. But UPS, eager to beef up its presence in Europe, made a bid for TNT in February; a month later they agreed on a price of €5.2 billion ($6.8 billion). If allowed to proceed without any disposals, the plannedcombination would have more than a quarter of the market in Britain and Italy, and nearly a quarter in France.

The European Commission (EC) is investigating these sorts of concerns. A decision is expected by the end of the year. The commission is not a soft touch: in March it meted out fines totalling €169m to 14 freight-forwarding companies, a different part of the logistics business, including someUPS subsidiaries, for price collusion. (DHL escaped a fine only because it was a whistle-blower.)

Package deal

Antitrust regulators worry especially about the effects on competition and innovation when it is a maverick, like the price-cutting TNT, that is being eliminated. Andreas Schwab and Jean-Paul Gauzès, both members of the European Parliament, wrote to Joaquín Almunia, the EC’scommissioner for competition, in June, expressing worries. They noted that the deal would leave only one European integrator, DHL, competing in Europe against the American duo, whereas there is no substantial European presence in the United States market. DHL withdrew from the American domestic market in 2009, and also pulled out of the British, Chinese and French markets, because the margins were toolow. (It still runs international services to destinations in these countries.)

The EC will have to examine not only the nature of the international express-package market today, but also how it is changing. All four firms are adapting to diminished traffic in letters and important documents because of e-mail, and the growing demand for parcel delivery to end-consumers generated by e-commercesites such as Amazon. The average size of parcels sent from business to business is also growing, as global firms increasingly depend on speedy supply, and guaranteed delivery times, of parts and supplies. That has blurred the line between express services and air freight, and led to increasing use by integrators of spare hold capacity on passenger planes.

DHL has seen these types of business...