Steady growth in economic activity coupled with expected boom in the coming years offer an opportunities to local players to firm their footing in the Pakistan market and for that purpose, TCS signed a partnership with UPS to offer international express services in the country to millions of customers.
The deal reflects the consolidation and expansion of courier and package delivery sector as such synergies have been witnessed recently when Muller and Phipps acquired OCS courier services and also set a business partnership with FedEx for international courier services.
TCS, as authorized service contractor, has been affiliated with UPS, which is the world largest express carrier and package delivery company.
Pakistan’s market of Courier Express and Parcel (CEP) sector witnessed an average annual growth of 13 percent to reach $300 million from 2010-15 as per an estimate which is likely to maintain its double digit growth of more than 10 percent by 2016-2020.
Pakistan Courier Express and Parcel (CEP) sector witnessed an average annual growth of 13% to reach $300 million from 2010-15
TCS is the biggest market players in the local market with 60 percent share but now it is setting its eyes to expand itself in the international market availing advantage of its largest network operative in Pakistan.
Currently, DHL is reported to hold 70 percent market share having partnership with OCS and FedEx, the subsidiary and partner of Muller and Phipps.
On the contrary, UPS remains a small player in Pakistan but it would definitely challenge its competitor DHL and FedEx with TCS, the courier, logistics and e-commerce provider.
According to TCS officials estimates, there are 10 value creation levers that this partnership would display, and unlock USD 70-80 million (~65% increase in size for the combined entity)with the potential cost synergies still to be evaluated.
M.A. Mannan, President and CEO of TCS Holdings, said:
We are delighted to combine the experience and penetration of TCS in the domestic market with the global reach and service quality of UPS to deliver a powerful proposition for customers’ worldwide.
This is an exciting time for us and we foresee considerable long term value generation for customers and both the companies as a result of this strategic alliance, which would contribute significantly to the national economy.
UPS is operating an integrated supply chain and worldwide network serving over 220 countries and territories. On the other hand, TCS has the largest footprint of 800+ Express Centers (Retail Outlets) and 4000 delivery professionals.
Muller and Phipps has 5000+ dedicated professionals, stationed at 89+ locations, reaching across 950+ towns and cities nationwide via 7+ warehouses, 50+ shared depots and 900+ owned vans.
DHL websites stated that its presence with a strong retail network of 54 service points, supported by 220 vehicles and over 500 employees working in Pakistan.
Big players of the courier and logistics sector are entering partnerships to boost their business globally and locally which should be result of good quality of services to customers in future.
On the other hand, small local players may face tough time for growth and presence in the local market. There are players in the courier express service including Leopard Courier, SpeedEx, DCS Courier, Paradise Courier and Logistics, and etc,
UPS is one of the most expensive courier companies out there, no wonder their operations in Pakistan are minimal.
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