DHL

Geographical

Road freight requires the relevant infrastructure to be available, for example there needs to be appropriate roads as that can accommodate large vehicles e.g. lorries as otherwise they cannot transport the goods, in the UK this is not a problem as generally there are good road infrastructure, whereas in some LEDCs this may be a problem e.g. in poorer areas of India as they have poor road networks so it will be difficult for companies to deliver there

What Goods are Restricted?

• Ammunition and fireworks
• Aerosol canisters
• Compressed air cylinders for scuba diving
• Flammable liquids such as petrol,
• Solvent based paints and perfume
• Some swimming pool chemicals
• Some household cleaning products
• Some garden care products

Road Freight and Distribution...

DHL

Owned by Deutsche Post

CEO: Frank Appel

Public Limited Company

Owners Include:

Institutional Investors 67.8%

Banks 21%

Private Investors 11.2%

Started in 1969 and was the first company to offer a door to door express delivery service

What Goods?

Seasonal Variations

Decline or Growth?

3 Firm Concentration Ratio

Road freight varies in demand throughout different times in the year, for example over the period before Christmas there will be a much higher demand from stores and household for a range of different products, as transport is derived demand this will mean that road freight use will increase. Although road freight may become unreliable over certain periods, e.g. in times of bad weather when it isn't safe to drive, also when road freight companies are working at full capacity there may be delays in delivery

Most products can be transported by road, in most cases even if the goods are transported by air, rail or sea they will also have to be transported by road, some examples of common items are;

• Technology e.g. mobile phones,
• Furniture e.g. sofas, cabinets
• Clothing
• Toys

Deutsche Post DHL, the world's leading postal and logistics group, continued to boost revenues and earnings in the first quarter of 2014. At nearly EUR 13.6 billion, revenues generated in the first three months of the current year rose more than 1 percent above

the previous year's level

Using the information from the table on the previous slide, we calculated that the concentration of the 3 firms spoke about, (DHL, TNT and FedEx) is 65%

Market Share

Road Freight

Growth or Decline...

Internationally

Road freight is essential to the UK economy, providing flexibility and robustness. It allows industry flexibility to locate away from rail stations, ports and airports, and is highly flexible being client driven. This includes such services as timed deliveries, something other modes which are timetable driven cannot provide.

Generally road freight is seeing growth and slow recovery from the poor international economic situation which occurred in 2008 effecting majority of economies.

TNT

Future Opportunities/ Threats

In Europe

TNT (Track 'n' Trace) is a worldwide road freight distribution service based in the Netherlands.

CEO: Tex Gunning

Originated as TNTNV but split into two companies; TNT and Post NL

TNT became a public limited company

Market share of 17%

FedEx

Between April 2013 and May 2013, the number of vehicles traveling from the UK to mainland Europe stood at 2.7million. The year previous to this stood at 2.43million therefore showing an 11% increase in road freight in Europe.

The figure stood at almost 2.9million in 2007 in 2007 which was the pre-recession period. This data reflects on how the industry is recovering from the recession and isn't quite up to the rate it was at before.

The price of fuel keeps increasing, this

is a threat to road haulage companies as

it will increase their costs, thus decreasing

their profits unless the rise prices, but by

rising prices they become less competitive,

this is not ideal especially as their are many

road haulage companies. Also as their are

some extremely large companies such as

those mentioned (DHL, TNT) it makes it

very difficult for smaller businesses to get

contracts, etc as they are less appealing

as they have less vehicles, staff

and experience

Decline or Growth?

Between 2013 and 2014, TNT saw a financial loss of worldwide revenue as it fell from €7100 million to €6700 million. Arguably this is due to increased competition and other substitue transport options such as rail and air travel.

Similar to TNT and DHL, FedEx is an American global courier delivery service provider based in Tennessee, USA.

Founded in 1971 by Fredrick Smith who now stands as Chairman, President and CEO.

Public Limited Company

Revenue of $45 billion 2013