INDUSTRY PROFILE

1.1

INTRODUCTION TO INDUSTRY

Express industry is a premium segment of the logistics industry, providing logistics services
for movement of time sensitive shipments. By creating an integrated chain including multimodal transport modes, both air and surface, express industry has fine-tuned the logistics
process for time- bound deliveries of shipments across domestic and international regions.
The express delivery market is the fastest growing segment in the overall logistics industry.
Express market provides integrated, time-bound, door-to-door, delivery services to multiple
industry businesses as well as to individual customers. Both documents like letters, trade
documents, applications, cheque books as well as non-documents like equipment parts,
electronic products, spare parts, trade samples are shipped through express services.
Peoples take many things for granted these days, never realizing how great we have it. Past
generations did not have many of the conveniences that we use every day. Transportation is
one area that has changed drastically over the decades and improvements have affected many
areas of life, including the speed at which we receive packages. Evolution of transportation
methods has transformed the courier service industry, making it faster and more convenient
than ever before.
Couriers have been around for hundreds of years, the earliest being runners, horseback riders,
and trusty homing pigeons that delivered messages in what was then considered a timely
manner. These were the days before mechanized transportation was available so foot
messengers ran for miles to reach their destinations, with very little reward. Even exclusive
messengers of royal courts during the middle ages were poorly paid for all their travels.
Small courier companies were established during the late 19th century, using stagecoaches to
carry personal messages to homes where phone service was not yet available. Some couriers
delivered packages, luggage, or even gold. The pony express was later established to
transport these items more quickly.
The inventions of railroads and automobiles took this industry to the next level. Once
interstate highways were built, couriers could travel across the country via smooth blacktop
with packages in Bicycle and motorcycle couriers began popping up in large cities,

transporting documents and other packages from one end of town to the other. Airplanes were
eventually commissioned to deliver packages quickly over the longest distances.
Mail-order retail business and increasing postal rates caused couriers to diversify and become
more competitive. The lines between transport methods blurred, with couriers performing
some of the same services as trucking transport companies and even the postal service. The
largest commercial couriers increased the speed of their package delivery and smaller
operations offered a wider array of services to meet local needs.
As per IBIS Worlds in-depth industry market research, the courier industry is having a
revenue of $206 billion with an annual growth rate of 3.1 % from 2009 to 2014. Businesses
in nearly every industry use these transport services to deliver documents and packages to
each other or to customers. Millions of private consumers use couriers to transport letters,
gifts, and other items to each other across the country and across the world.
1.2

CHARACTERISTICS OF THE EXPRESS DELIVERY SERVICES

1. End-to-end logistics solution: express delivery services provide a complete chain of
solutions from the collection of shipments at the doorstep of the consignor to
packaging, transportation, storage, clearances, and the final delivery of shipments. For
cross-border movement of goods, express delivery services include handling of
custom clearances and payment of relevant duties as well.
2. One - stop solution: express delivery services act as a one-stop solution for handling
all logistics related requirements of the customers. Given the integrated nature of
service, the customer needs to deal with only one operator in the entire value chain of
service.
3. Time bound service: time bound delivery is the most critical aspect of the express
industry. The delivery timelines ranges from 24 hours to 72 hours for most
destinations, in addition to the day definite delivery, express industry also provides
time definite delivery services.
4. Tracking and delivery confirmation: express delivery services provides real time
tracking of shipments to enable visibility to the customer on the movement of goods
and provides delivery confirmation for the shipments.
5. Global reach: express delivery services links to a large number of destinations across
regions providing global reach to its customers.
6. Premium pricing: express delivery services is the premium segment of the logistics
industry and is priced at a premium compared to the traditional delivery services
given the time-bound nature of services.

Compared to the conventional carrier services, the express industry is focused on fast and
reliable delivery of movement of goods with an end-to-end integrated service under the
control of one operator. The express industry is a key business enabler and plays an important
role in trade facilitation and in the overall economy. By providing faster deliveries, it helps its
customers in meeting their evolving requirements with regards to time sensitive logistics.
1.3

EVOLUTION OF THE INDUSTRY

Globally, the history of express industry can be traced back to personal messengers and
delivery services used since ancient times. A similar history can be traced back for the Indian
express industry. Today, the industry has evolved with a wide global network handling
various document and non-document parcels on a large scale.
1.3.1

IN THE GLOBAL CONTEXT

Logistics is one of the most important basic industries for any economic growth as it is the
management of the flow of products from the place of their origin to the place of their
consumption, thus the industry also involves the integration of material handling,
warehousing, packaging, transportation, shipping security, inventory management, supply
chain management, procurement, and customs service.
The Express Delivery Sector is relatively new it began in the US in the 1970s and is one of
the fastest growing industries in the world. Over the years, it has evolved from being a basic
courier service provider delivering documents and parcels to an integrated door to-door timebound service provider. Globalisation, liberalisation and increase in cross-border trade and
investment flows have contributed to its growth. With the development of the global supply
chain, corporations across the world are now optimising costs and maximising efficiency by
focusing on their core business activities and outsourcing noncore activities like
transportation and delivery to specialised service providers such as EDS companies.
The express business is cyclical and highly sensitive to fluctuations of trade flows and global
GDP. Most of the express delivery companies witnessed a slower growth in their revenues in
2011 due to financial turmoil in Europe, slowdown in Asian exports and volatile fuel prices.
The industry is expected to deliver positive results in the coming years due to growing
importance of E-commerce and the resulting growth in business-to-consumer (B2C) market.
Asia Pacific and Latin America are high growth markets for the industry in line with

economic growth in these areas. Key issues faced by industry include rising fuel prices, high
operating costs and strict regulations.
The express delivery services were initially largely limited to document shipments. Over a
period of time, it has evolved into the delivery of documents and parcels to specialist items
such as high-tech products, and general airfreight commodities. Typically, the types of goods
transported by express delivery services are high-value/low-weight items.
Since express delivery companies are a key component in the logistics chain, it is often
difficult to distinguish between the services of express companies, logistics companies and
public postal providers. The public postal providers of many countries also offers express
delivery and parcel delivery services such as Express Mail Services (EMS) of India post.
Generally a client decides among the different forms of delivery such as logistics services,
courier or mail services, postal services and express services depending up on the size of the
consignments, time taken, mode of delivery, means of transport used, types of services
offered, costs, etc.
Today, the global market for EDS is pretty heterogeneous. It is dominated by four large
players, who are also referred to as integrators. Namely, Federal Express (FedEx) (US)
Parcel Service (UPS) (US), Thomas Nationwide Transport (TNT) (Netherlands), DHL
Express (Germany) However, the industry remains highly competitive with a large number of
players including small and medium-sized players.
The global logistics industry mainly comprises a complex range of freight and cargo related
transportation sectors, such as shipping, warehousing, courier, and road/rail/air freight.
According the report from CandM Research, the total global logistics market reached a value
of about $4 trillion in 2013, representing an almost 10% of global GDP. The global
transportation services market is fastest growing sector with more 7% year on year growth
since 2011, now it is expected to generate revenue of 3.8% trillion in 2016. The US currently
accounts for more than a 42% of global transportation services sector.
Over the next few years the global logistics market will see the growth in demand away from
traditional Western economies to the emerging markets of China, India, other Asian
economies, the Middle East and Latin America. However the size of the US and European
logistics industries will still remain strong.
Some major market segments of global logistics industry:

The global air transportation services industry has been experiencing a decline in growth rate
since 2012, while the airline market is expected to reach 137 billion by 2017.
After generated around $194 billion in 2011, the global rail freight industry will have an
annually growth rate of more than 6% until 2015, and the industry growth will increase to a
yearly rate of 8%, reaching $286 billion by 2016, predicted by Market Line. The industry
consumption volumes have remained the growth of 4% year on year.
Road freight industry is so far the leading segment in the global logistics industry,
representing over 74% of the overall industry in terms of value. The global road freight
market is expected to top 2.2 trillion in 2015, which is a 28% increase over 5 years period
since 2010. The US represents for 56% of the world road freight sector in terms of value.
1.3.2

IN THE INDIAN CONTEXT

The postal and courier industry is one of the oldest industries in India. According to
Deogawanka (2008), the first mention of a systematic postal service using foot messengers is
found during the reign of Chandragupta Maurya (322-298 B.C.) when messengers, doots
(emissaries) and pigeons were used for these duties. The first organised form of courier
services is the Angadia services. These are the people who carry documents and valuables as
a part of their Ang or body.
The advent of organised courier and EDS in India can be trace back to the late 1970s and
early 1980s. As trade and industry grew, the need for an organised courier service was felt. In
fact, foreign companies also started entering the Indian market during that time, mainly
through tie-ups with Indian companies. The liberalisation of the Indian economy in the 1990s
resulted in an increase in Indias trade both in goods and services. Indias international trade
has increased more than nine-fold since the 1990s. This generated the need for supporting
infrastructure, which in turn facilitated the fast growth of the EDS/courier industry.
The EDS/courier industry in India has undergone significant changes. Family-owned courier
businesses have grown and developed into EDS companies providing integrated services.
There have been a number of mergers, acquisitions and tie-ups, which has resulted in some
consolidation. Nevertheless, the express/courier industry in India is still highly fragmented
with a wide variety of companies offering different kinds of services. There are four main
categories of express/courier companies in India, apart from India Post, which also offers
express mail services. These include the global integrators, the large Indian companies,
regional players and small courier companies.

All the four global integrators (UPS, FedEx, TNT and DHL), are present in India. They
mostly focus on large corporate clients. They carry high-value consignments and documents,
mostly to and from international markets and they offer regular and value-added services
based on international standards. They do have tie-ups, partnership, etc., with local Indian
companies. Global integrators have also acquired Indian companies who cater to the domestic
market. For example, Blue Dart was acquired by DHL in 2004 and Prakash Air Freight
Private Limited is owned by FedEx. These companies have well-developed logistics
networks and infrastructure, including own aircraft, dedicated gateways for custom clearance
(for example, DHL and FedEx in Delhi airport), sophisticated globally owned networked IT
and scanning systems, etc.
The large Indian companies such as Desk to Desk Courier (DTDC), First Flight and
Overnight Express focus on the domestic market and most of them have a good, countrywide
network. Some of these companies also service selected international markets. In terms of
their market segment, it can be said that these companies target the entire spectrum of the
domestic market (including intra-city delivery and mass mailing) along with the value
segment of the international market. These companies also provide some of the value-added
services offered by the multinational EDS providers.
The third category consists of regional Indian players. They may have a countrywide network
but generally, they are more focused on certain regions of the country. Some of these
companies are located in manufacturing hubs like Tirupur (knitted textile hub) in the south or
Jalandhar (sports goods hub) in the north. These are medium sized companies (for example,
Shree Maruti Courier Service Private Limited in the western part of India) but they compete
directly with the bigger Indian companies in the regions where they have a strong presence.
The fourth category consists of large numbers of small companies, which essentially provide
local courier services. They have a much lower level of capital and investment and are mostly
in the unorganised sector. These companies provide door to-door courier service without any
other value-added services. They mostly carry low-value items like documents, gifts and
some mass mailing items, and their charges are also lower than that of the organised
operators.
The Indian express industry, like its global counterpart, received an impetus from the
development of the aviation sector. Express delivery services or couriers as they were more
commonly known became synonymous with on-board carriers, carrying bags of documents

on commercial flights. The next major break was witnessed with the advancement and
implementation of the information technology enabling tracking, scheduling, and helping the
industry scale up operations.
Although the industry started with small players, as the industry grew, requirements for a
large network of operations and organizational setups have influenced the industry to
consolidate. The Indian industry is still highly fragmented, but it is increasingly
consolidating. This is in line with the trends observed globally where the industry is
dominated by few large players but a large number of small and medium regional players still
continue to operate.
1.4

MAJOR PLAYERS IN COURIER INDUSTRY

International Segment
1. United Parcel Service, Inc.
United Parcel Service of North America, Inc., typically referred to and branded as
UPS, is the largest shipment and logistics company in the world. The American global
package delivery company founded on August 28, 1907 and is headquartered in Sandy
Springs, Georgia, which is part of the Greater Atlanta metropolitan area. UPS delivers
more than 15 million packages a day to more than 6.1 million customers in more than
220 countries and territories around the world.
2. FEDEX
FedEx a courier company head quartered in Memphis, Tennessee United States. The
company was founded in 1970s for overnight shipping purpose. The company is
primarily associated with document shipping and express packs. FedEx Corp.
provides customers and businesses worldwide with a broad portfolio of transportation,
e-commerce and business services. With annual revenues of $45 billion, the company
offers integrated business applications through operating companies competing
collectively and managed collaboratively, under the respected FedEx brand.
Consistently ranked among the world's most admired and trusted employers, FedEx
inspires its more than 300,000 team members to remain "absolutely, positively"
focused on safety, the highest ethical and professional standards and the needs of their
customers and communities. FedEx Express provides fast and reliable delivery to
every U.S. address and to more than 220 countries and territories around the world.
3. DHL Express

DHL Express is a division of the German logistics company Deutsche Post DHL
providing international express mail services. Deutsche Post is the world's largest
logistics company operating around the world. DHL is a world market leader in sea
and air mail. Originally founded in 1969 to deliver documents between San Francisco
and Honolulu, the company expanded its service throughout the world by the late
1970s.
4. United States Postal Service
The United States Postal Service (originally called the U.S. Post Office Department,
when it was completely managed by the U.S. government before 1971) also known as
the Post Office, U.S. Mail, or Postal Service is an independent agency of the United
States federal government responsible for providing postal service in the United
States. It is one of the few government agencies explicitly authorized by the United
States Constitution. The USPS employed 626,764 workers (as of January 2014) and
operated 211,654 vehicles in 2013. The USPS is the operator of the largest civilian
vehicle fleet in the world. The USPS is legally obligated to serve all Americans,
regardless of geography, at uniform price and quality. The USPS has exclusive access
to letter boxes marked "U.S. Mail" and personal letterboxes in the United States, but
still competes against private package delivery services, such as UPS and FedEx
5. TNT Express.
TNT Express N.V. is an international courier delivery services company with
headquarters in Hoofddorp, Netherlands. The firm has fully owned operations in 63
countries and delivers documents, parcels and pieces of freight to over 200 countries.
The company recorded sales of over 6.69 billion in 2013.The name TNT is short for
Thomas Nationwide Transport, after Ken Thomas, an Australian businessman who, in
1946, set up his own transport business with just a single truck. Its major competitors
include United Parcel Service (UPS), FedEx and DHL.
Domestic Segment
1. Blue Dart
Blue Dart, The all-cargo airline company was incorporated in 1995 as a wholly owned
subsidiary of Blue Dart Express, a Mumbai based integrated express package
Distribution Company. It is South Asia's premier courier, and integrated express
package Distribution Company having the most extensive domestic network covering
over 34,248 locations, and service more than 220 countries and territories worldwide

through our group company DHL, the premier global brand name in express
distribution services.
2. India Post
3. First Flight Courier Ltd
First Flight Couriers came into being on Monday, 17th November 1986. It all began
with the setting up of three offices at Kolkata, Mumbai and Delhi. Indias Largest
Domestic Courier Company with a dedicated workforce of over 17000 plus
employees and Serving over 220 countries globally.
4. GATI-KWE
GATI -Kintetsu Express Private Limited (GATI-KWE) is a joint venture company
between GATI Indias pioneer and leader in Express Distribution and Supply Chain
Solutions and Kintetsu World Express Japans leading logistics provider. Following
the joint venture GATI-KWE today offers an unmatched service offering that brings
in local experience with global expertise. GATI-KWE is a 3500 people strong
company with an annual turnover of Rs.8088 million. A large fleet of 4000 vehicles
and an assured space across 28 airline sectors ensures that your shipments are
delivered in the right time at the right place.
5. Safe Express
Safe Express began its journey in 1997 with a mission of delivering logistics
excellence to its customers and ensuring their success. Today, the firm has firmly
entrenched itself as the Knowledge Leader and Market Leader of supply chain &
logistics industry in India having a fleet of over 4000.
6. PROFESSIONAL