Simmering Undercurrents

abhishreshthaa

Abhijeet S
Simmering Undercurrents


The global biggies UPS, FedEx, TNT and DHL had originally all come into India piggy-backing on domestic Indian players. While initially Skypak tie-up with the TNT in the nineties, Elbee had tied up with UPS. Both Elbee and Skypak were then fundamentally strong players in the domestic market, who leveraged their networks to fetch good business for their partners and therby improve their spreads.


However, both these alliances were short-lived. TNT is now in India on its own and Skypak has been reduced to a lesser known player. Elbee, too, industry analysts opine, has been forced to cope with dwindling market shares ever since it snapped ties with UPS in the late nineties.



After having operated in India in association with Cyrus Guzder-promoted AFL Limited, the Netherlands-based DHL Worldwide finally came to India earlier this year. It is only in the last one year has AFL prepared itself to tap the domestic market and launched another company, AFL Wiz earlier this year. However, with Mr. Guzder holding around 48% in DHL India, it is a queasy situation wherein, DHL also has an association with Blue Dart which is AFL's competitor in the domestic market.


But DHL does not agree. Says S. Raghunandhan, country manager, DHL India : "The relationship between DHL and Blue Dart is a very special one designed to benefit Blue Dart customers and will be independent of the relationship we have with anyone else. But as a result of this new alliance, of course, the dynamics of the express industry will change."



Some industry observers however view this move as one that could help Blue Dart arrest its declining share price which has come down initially since the news of its planned snapping of ties with FedEx broke out. Clearly, then, even as the current round of activity moves ahead at speed, it is clear that the momentum to consolidate will only further increase.
 
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