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We will be focussing on information technology investment and infrastructure, including hubs and material handling equipment. We plan to spend €6 million on IT and hubs.

T.E. Raja Simhan

TNT N.V., the €13-billion Dutch express mail and package service provider, has been operating in India since 1993. For 13 years, its Indian subsidiary, TNT India, has been providing only international express services. In February 2006, it launched a domestic service in India. It followed this by acquiring Speedage, an Indian road express company for an undisclosed sum. “Thanks to the acquisition, we are today among the top three express companies in India,” said Mr Abhik Mitra, Managing Director, TNT India. In an interview with Business Line, he discussed Speedage acquisition, its integration with TNT India and the road ahead for the company.

Excerpts from the interview:

Why Speedage?

We wanted to enter the domestic road express service and were looking at a company that had presence across the country. Speedage had that reach. But it was a semi-express company and did not provide cargo track and trace facilities. They had only open trucks and, hence, could not carry high-value items. For express cargo, providing a reliable time schedule to customers was critical. For TNT, it made a lot of sense to acquire such a large company than build a pan-India network, which would take a few years.

Is Speedage fully integrated with TNT?

In the last eight months we have transformed Speedage into TNT. The entire process and people mindset at Speedage was transformed and brought to TNT”s global standard. People at Speedage were used to Indian standards, and we made them think global.

What does the acquisition mean for TNT?

It made us the first multi-national brand to offer international and domestic services using an integrated air and road network. We added 514 depots, 26 transit hubs, 730 vehicles and 1,195 employees to the TNT network.

Will you change the brand to TNT?

Yes, early next year.

What is your investment plan?

We plan to spend €6 million (Rs 33 crore) on information technology and hubs. In fact, last year we announced that TNT would spend around €100 million (Rs 550 crore) in India over a five-year period. We are focussing on information technology investment and infrastructure, including hubs (warehouse), operational equipment, and material handling equipment. We are looking for space in various parts of the country for the hubs.

Post Speedage acquisition what is the current infrastructure?

Prior to our domestic foray we were present in 17 cities and now we are in 600 cities. Our depot space has increased from 80,000 sq ft to 10,00,000 sq ft. Our fleet size has almost doubled. Currently, TNT has over 1,700 vehicles traversing the length and breadth of the country. Our human resources increased to 2,500 from just 600 in 2005. We are still expanding and will make more investments as the customers demand additional services and to cater to our accelerated growth.

What is the break-up of your business in domestic, international and road?

The global express industry has been valued at around $149 billion, while the size of the Indian express industry is around $1.60 billion. Of this, the international express segment contributes to 40 per cent and the domestic segment forms the remaining. In India, TNT has a market share of around 22 per cent in the international express segment. We have a market share of around 14 per cent in the domestic road express segment. In India, TNT has been growing at the rate of 40 per cent, which is faster than the industry growth rate.

Could you give some financial details?

In 2006 we had total operating revenues of €10,060 million (Rs 55,330 crore), which was a considerable jump from the previous year’s figures of €9,329 million. Of this, €6,011 million in 2006 was only from the express segment.

What is your business focus in India?

TNT India has adopted a vertical focused strategy and identifies specific needs of different sectors and rolls out offerings to suit each target segment. For example, there is TNT Scholar Pak for students; TNT Medpak for life sciences and TNT Exhibition Services for Indian exporters participating in overseas exhibitions.

And your global profile?

TNT Express is the world’s leading business-to-business express delivery company. It delivers 3.4 million parcels, documents and pieces of freight a week to over 200 countries using a network of nearly 900 depots, hubs and sorting centres. It operates over 19,000 road vehicles and 42 aircraft and has the biggest door-to-door air and road express delivery infrastructure in Europe. Globally, TNT Express has 45,000 employees.

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