Europe’s second largest global express company boosted capacity on its Europe-China route on 18 September with the addition of its own B747-400ER freighter, replacing capacity previously booked on other commercial carriers. The 110-tonne capacity freighter will operate three times weekly between Hong Kong and its main air hub in Liege,Belgium.

TNT highlighted the fact that this service gives customers in southern China seamless connectivity with its air and road network for delivery throughout Europe and said it reflects TNT’s commitment to investing and growing in Asia.

Speaking at a press briefing in Hong Kong last month, James McCormac, regional managing director of TNT Asia Pacific acknowledged it was an “uncertain moment in difficult economic times, but we believe it is the right investment.”

“We have a business case for the new service which justifies the investment and our expectations are that we will over-achieve that business case,” he said, adding that he is confident this will be the case through the traditional peak season and Chinese Lunar New Year period at least. McCormac also affirmed that TNT was committing to this service on a long term basis.

Adding that the key sector driving this expansion is the high-tech market vertical, Michael J Drake, regional MD, TNT North Asia said: “There is a position in the market that we have attained and that we want to strengthen, it’s a key strategy for today and will be a key strategy going into the future and we are resourcing up to maximise it.”

Since beginning operations, the freighter has been running at around a 90 per cent load factor and Drake said business has been “robust” all year and while volumes have been down year-onyear, TNT “has been outperforming the market on an international basis and in real terms our leadership to Europe has been strengthened this year.”

He added that a key value proposition of the service is that it provides a “very robust access” to TNT’s extensive roadnetwork across Europe.

Asia of strategic importance
“Asia has always been a market of great strategic importance to TNT and despite the challenging economic conditions what we would like to express is our confidence and commitment to TNT’s long-term growth and development in the region,” McCormac said.

“We’re pretty clear about what we feel we need to do to ensure success in this market and our investments in Asia have been focused on two fronts. First we are committed to raise our customer service offerings in the region and secondly we will continue to strengthen service to Europe by increasing connectivity between Asia and Europe.”

McCormac said the geographical and economic proximity to the Pearl River Delta and its central location in Asia, made Hong Kong the natural choice as a hub for serving customers not only in the south of China, but also in neighboring countries like Vietnam, Thailand, the Philippines and Taiwan. He added that it complemented TNT’s other Asian international hubs in Shanghai and Singapore which are served by a TNT B747 freighter on the route Liege- Singapore-Shanghai-Liege.

“With our integrated air and road delivery capabilities in Asia and Europe, we are well-placed to capitalise on the strong trading links between the two regions,” said McCormac. “More importantly, the addition of a dedicated freighter from Hong Kong will ensure our customers, especially those in the hightech, telecommunications, electronics and fashion industries, become more competitive due to faster factoryto- market lead times and increasing inventory management efficiency.”

“Our continuous investment in Asia clearly demonstrates TNT’s long-term confidence in the region and our continual commitment to raise our service capabilities on behalf of our customers.”

Green shoots?
When asked whether TNT is seeing the start of a recovery out of Asia, McCormac said there are two general views in the market. The first is that a restocking of inventories is underway which heralds the start of an upturn, while the other points to a double dip.

“From our point of view, we’re reasonably satisfied with our position at the moment. It’s hard to estimate whether there will be a peak season, in traditionalterms, but there does seem to be an encouraging pickup in the business, butit would be inappropriate to say there isa recovery underway.”

Saying he sees the industry as robust in the medium to long term, one key trend that has clearly emerged is that customers have become quite circumspect about how they make trade offs between service and price. “I think that is quite a typical trend in the marketplace and it’s a trend that has been exacerbated by the current crisis,” McCormac adds.

“That’s one of the reasons we believe in this value proposition out of Shanghai, out of Hong Kong and linking from Singapore as well. We are able, because of our road networks, not just in Europe, but in Australia, India, and in Asia that we can offer a flexible service by air or road linking into an air network to Europe where there is the option of air or extensive road network.”

“What we’re finding is that customers are often willing to sacrifice a day in the service cycle if it gives them an effective reduction in the pricing.”

“We’ve shown the market that we can adapt in difficult times and offer value-added solutions to our customers and from my point of view, the ability to adapt is one of the last competitive advantages left.”