Analysis of the courier industry

DTDC

Courier industry Availability (presence) is important

Rates between different courier companies do not differ much

Rates depend upon Distance Mode of transportation Type of goods –perishable or not Weight of the product to be sent Value added service

Industry analysis Courier industry earlier limited to 4 metros Extended fast to other metropolis, township & rural areas Manpower intensive Highly skilled & trained personnel Competitive market India has around 2300 courier companies

Organized sector – 27% Semi-organized sector – 43% Unorganized sector – 27%

Indian courier industry-Rs. 7,000-crore

Volume distribution

27%

43%

27%

3%

organized semi organized unorganized EMS Speedpost

Industry analysis Courier industry

Time-definite Reliable transportation services

Exhibited growth of about 30% over past 4 years

Expected to grow at 25% in next 2-3 years

Major players Blue Dart, DTDC, AFL, First Flight, GATI Unregulated industry (no entry barrier)

Revenue distribution

64%

26%

4% 6%

organized semi organized unorganized EMS Speedpost

Contd… Service categories

Intra city Inter city

Surface mode Air express

Factors contributing for growth Economic growth Technological advancements Escalation of industrial sector Increase in export/import Effect of liberalization

“Courier industry — It's all

about technology, consolidation”

SWOT analysis: courier industry

STRENGTHS WEAKNESSES

• Around 40% annual growth • Erratic airlines’ systems

• Speed

• Security (tracking)

• Dependency on increasing oil prices

• Weak IMC

OPPURTUNITIES THREATS

• Investments by giant corporates • Increased competition

• Economic growth • Unorganized sector

• 10% profit margin - scope for improvement • Demanding clientele

• Decreased restrictions in International ExIm market • Brand switching

• Reduced tariffs • Increasing oil/ATF rates

• Improved Infrastructure  

Ways of Market coverage Wholly owned

International tie-up for global reach Helps in infrastructure Helps in reach

Rising prices High oil prices & air freight

Overall costs incurred by domestic couriers increased between 22% - 25%

For consumer, tariff is up by 15% - 20% Consumer paying around Rs. 3/kg more Price hike

In ground: 10% - 15% On air: 15% - 20%

DTDC Strategic Intent

To save time by adopting ‘Right-Time approach in every part of Business’

To impartially select and develop employees & service partners (Franchisees) for meeting quality service standard

Mission To focus on Customer Loyalty and make it the goal of the

Organization. To encourage people for adoption of new technologies,

processes and systems for improved, reliable and speedy service

To relentlessly monitor to reach a minimum net service level of 98% delivery

Vision To be the most Admired and Successful Express Distribution

Company in India by meeting and exceeding Customers' expectation of services

Company analysis DTDC Courier & Cargo Ltd. (DTDC) was incorporated in

1990 India’s largest courier company with a market share of 270

crores Presence in 3700 Indian & 240 international locations

delivering 10.5 million parcels every month Turnover for 2007-08 was 14,800 lakhs from the domestic

sector and 3000 lakhs from international sector Pioneered the franchisee concept in India with 4000

franchised outlets supported 176 offices all over the country

Typical offerings Timely delivery

Safe delivery

Reasonable prices

Augmented offerings Pin code finder

Helps to locate addresses of all DTDC offices anywhere in India by typing destination’s pin code

Location finder Online database with addresses of above 2500

Pick up request DTDC representative comes to pick up customer’s

consignment

Online Tracking SMS Tracking and alert facility News flash service

Contd… E-shopping @ DTDC

In association with fabmall.com, customers can choose from a wide choice of gift articles to be hand-delivered

DTDC PLUS launched in April 2007, by which Documents & Packages

weighing up to 5 kilos can be shipped through DTDC

Saving of 50% on excess baggage Carrying of excess baggages & delivering to the consignee's

door Clearing of customs formalities in case of detention

Key players of courier industry Blue Dart-DHL

DTDC

TNT

FedEx

First Flight

Professional Couriers

EMS

Safe Express

Trackon

SkyPak

GATI

Blazeflash

Elbee

Overnite express

Patel on board

PROCESS

Customer calls

Customer serviceorder

Customer givespackage

Franchisee ownermakes entry

Package deliveredto hub

Sorting donePackages sentto main office

Sent to Mumbai

Sorting doneLoad for delivery

via rail,road or air

To destination

Unload & sort Load on truck

Goes to mainoffice

Sorting done

Delivered tohubs

Franchisee ownerpicks up package

Package delivered at customer’s door

DTDC BlueprintDTDC Blueprint

Line of interaction

Line of visibility

Line of internal interaction

Marketing Strategy Audit for DTDC Provider gap 1

Upward communication 5/10 Relationship Focus 6/10 Service Recovery 3/10SCORE OBTAINED : 14/30SCORE OBTAINED : 14/30

Provider gap 2 Systematic service design 7/10 Presence of customer defined standards 8/10 Appropriate Physical evidence & Service scape 7.5/10SCORE OBTAINED: 22.5/30SCORE OBTAINED: 22.5/30

Key: 1= poor 10= excellent

Provider gap 3 Effective role fulfillment by customers 9/10 Effective alignment with service intermediaries 7/10 Alignment of supply & demand 5/10SCORE OBTAINED: 21/30SCORE OBTAINED: 21/30

Provider gap 4 Effective management of customer expectations 4/10 Accurate promising in advertising & communications 6/10 Adequate horizontal communications 5.5/10

SCORE OBTAINED: 15.5/30SCORE OBTAINED: 15.5/30

Key: 1= poor 10= excellent

Contd…

Customer perceptions vs Importance ratings of a DTDC customer plotted on a Priority matrix

DTDC

PEOPLE

People (employees) Diverse work force

Over 13000 employees

Over 4000 business partners

Knowledge-driven work environment

Equal opportunities to all employees

Training programs and multiple developmental initiatives

Lays stress in constant learning

Franchisee-Franchiser Benefits for a DTDC franchiser

Leveraged business format for greater expansion & revenues Knowledge of local markets Shared financial risk & more working capital

Challenges for a DTDC franchiser Difficulty in maintaining & motivating franchisees

Inconsistent quality Customer relationships are controlled by the franchisee rather

than the franchiser

Technology Accuracy and integrity of transactions

Customized IT solutions

Franchisees - access to Corporate and Regional Offices

Electronic network - largest in the country

Over 300 POPs who can link with central database

Wide area network provides synergy to physical network

Modes of link to central database Leased lines Digital Subscriber Lines (DSL) Cable and dial up lines

Contd… Enterprise Class Gateway anti-virus solutions

400 million transactions on IT systems 

4 crores invested for centralization

Latest MIS reports

Contd… Opts for Document Management System from Newgen

Software

Software ‘Pocket’ used for HRMS to manage the entire cycle of staffs – recruitment, joining, training, internal growth and exit

Database servers, mail servers, anti-virus servers, backup solution, SMS and web-tracking, auto alert and delivery information system

Introduction of tracking

Only courier company to introduce both GSM and CDMA based mobile trackers, rate, pin code & location finders

Future – where DTDC is heading Enhancing technology to provide end-to-end solutions Re-architecting the solutions Future tech deployments-totally customer centric Upgradation of its infrastructure and human resource

Planning to launch A WAP based website Complete technology solutions for mass mailers Indigenous hand held device for mobile delivery workforce to

capture data as and when it is ready ERP solutions Working on automating all its franchisees Automating processes where customers can print and paste

their own consignment numbers

Thank you