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Oil Volatility Driving Shift toward Use of Road and Rail for Express Deliveries in EU
Modal shift in the European Union express delivery market as global integrators look set to move away from reliance on air
London — December 22, 2008 — The rising volatility of oil prices and the consequent fuel surcharges applied by integrators such as DHL, TNT, UPS and FedEx, combined with the economic slowdown, has led to a gradual shift in customer demand within the European Union market away from express and parcel delivery services via air to alternatives such as road and rail, according to report from market analyst Datamonitor.
Datamonitor believes the European rail network not only serves the freight industry well but also is set to be penetrated by the express players as it provides a plausible alternative to the costly air express service.
Oil Price Volatility Sparks a Rethink
In view of the oil price volatility, global integrators like DHL, UPS, FedEx and TNT have been revising fuel surcharges, which shot up considerably in the months of May and June, only to be followed by slumps in more recent months. Consequently, customers and operators alike have witnessed uncertainty in express rates within the domestic and international air express segments.
Most of the express and parcel delivery companies are starting to see road and rail as viable alternative modes of transport because of the costs and service capabilities involved compared with air services. In the three mature markets of Germany, France and the U.K., express operators are increasing the use of the rail sector, especially in the international delivery services between European countries where trade flows are vibrant.
Express operators such as Time:Matters (Germany), DHL (U.K.), Business Post (Same Day) UK and Swiss Post are already offering express services through the rail network to serve same day and next day domestic delivery requirements. U.S. operator FedEx has plans to team up with the French rail network as high speed TGV trains running at 300 kmph (Eurocarex-Cargo Rail Express project) can prove to be both a viable solution for time definite deliveries and help reduce reliance on air networks for domestic and international deliveries within the E.U.
This is also expected to streamline critical overnight express deliveries, as rising noise levels due to nighttime deliveries in the airports continues to cause problems for residents in the surrounding airport area. Hence, nighttime deliveries via rail, which can serve to carry express freight along with parcels, are considered a more sustainable option as opposed to air.
Datamonitor believes the European rail network not only serves the freight industry well but also is set to be penetrated by the express players as it provides a plausible alternative to the costly air express service.
Oil Price Volatility Sparks a Rethink
In view of the oil price volatility, global integrators like DHL, UPS, FedEx and TNT have been revising fuel surcharges, which shot up considerably in the months of May and June, only to be followed by slumps in more recent months. Consequently, customers and operators alike have witnessed uncertainty in express rates within the domestic and international air express segments.
Most of the express and parcel delivery companies are starting to see road and rail as viable alternative modes of transport because of the costs and service capabilities involved compared with air services. In the three mature markets of Germany, France and the U.K., express operators are increasing the use of the rail sector, especially in the international delivery services between European countries where trade flows are vibrant.
Express operators such as Time:Matters (Germany), DHL (U.K.), Business Post (Same Day) UK and Swiss Post are already offering express services through the rail network to serve same day and next day domestic delivery requirements. U.S. operator FedEx has plans to team up with the French rail network as high speed TGV trains running at 300 kmph (Eurocarex-Cargo Rail Express project) can prove to be both a viable solution for time definite deliveries and help reduce reliance on air networks for domestic and international deliveries within the E.U.
This is also expected to streamline critical overnight express deliveries, as rising noise levels due to nighttime deliveries in the airports continues to cause problems for residents in the surrounding airport area. Hence, nighttime deliveries via rail, which can serve to carry express freight along with parcels, are considered a more sustainable option as opposed to air.
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