Pakistan’s most recognized courier, logistics and e-commerce provider, Tranzum Companies and Services (TCS) has announced a partnership with United Parcel Limited (UPS), the world’s largest express carrier and package delivery company based out of the U.S., a press release announced on Monday.
The agreement enables TCS to offer international express services in Pakistan as the Authorized Service Contractor (ASC) of UPS. The contract will facilitate international retailers like Amazon and Ebay to gain access to the services of a local player (TCS) with significant infrastructure across Pakistan. In other words, subject to Pakistan’s inclusion in Amazon’s availability list, Pakistani buyers will be able to now order from Amazon directly as the logistics issue will now be resolved.
The Courier Express and Parcel (CEP) market is an attractive prospect for logistics players in Pakistan. This partnership is likely to display, and unlock $70-80 million increase in the size for the combined entity translating to 65%, with potential cost synergies still to be evaluated, TCS said.
“we forsee considerable long term value generation for customers and both the companies as a result of this strategic alliance.”
With DHL’s dominance in international courier sector and the potential partnership between OCS and FEDEX; the courier market landscape is evolving to become significantly more challenging, especially for other players in the market.
Still small in size, the CEP market stands at approximately $300 million, of which $200 million come from domestic transactions while the remainder results in from international business, TCS said in the press release. It has grown at almost13% per annum during the last five years and is expected to continue at10% per annum till 2020, it said.
With this partnership, TCS, which accounts for 60% share in the domestic delivery section, will get a significant boost in the international market, which is currently dominated by DHL – the largest international player in Pakistan that enjoys 70% share in that segment.
“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,” said M.A. Mannan, President and CEO of TCS Holdings. He further said that this is an exciting time for TCS and he foresees considerable long term value generation for customers and both the companies as a result of this strategic alliance.
With immediate effect, documents, parcels and freight from anywhere in the world on the UPS network can be collected and transported to Pakistan. These will be delivered through TCS’s network of over 850 Express Centers and more than 4000 delivery professionals in the country.
Similarly, for exports, TCS will collect directly from individuals, small and large companies and organizations to handover to UPS for global distribution. TCS also announced that corporate customers will receive sector-specific solutions based on UPS’s expertise in healthcare, aerospace (defense), retail, consumer goods, industrial manufacturing and distribution.
Although UPS is a small player in Pakistan with only a share of $10 million, the press release said their partnership with a local courier giant can take further intensify the competition in that segment.