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. Last Updated: 07/27/2016

Express Industry Races Ahead

The express delivery business is booming.

The top two companies on the market, DHL Worldwide and TNT Russia, said Wednesday that their businesses grew 31 percent and 40 percent last year, respectively, although neither would divulge dollar figures.

"This is the highest rate of growth among all 200 countries that TNT operates in and the largest we've seen in Russia after the 1998 crisis," TNT Russia general director Harro van Graafeiland said, adding that growth in 2000 was just 7.5 percent.

As a result of Russia's dismal postal system, the express courier market is one of the few in Russia in which foreign firms claim a virtual monopoly. According to a Research International report last year, America's DHL holds half of the market, followed by Amsterdam-based TNT with 19 percent and U.S. companies United Parcel Service and Federal Express with 10 percent and 7 percent, respectively.

TNT attributed the brisk growth rate to a healthier economy and more demand from domestic companies. "Russian companies are more actively ordering domestic delivery services than international destinations, as compared to the last few years," said TNT marketing and business development manager Maria Korbut.

Irina Krasnopolskaya, head of DHL's marketing department for Russia and the CIS, said preliminary figures for 2001 indicate a growth rate of 30 percent, which she categorized as "quite high."

"We don't exclude that DHL's share of the market declined as a result of our competitor's growth," she said. "But we don't see anything awful in this fact. It is hard to have more than 51 percent in a such an actively growing market like Russia."

Unlike previous years, DHL is bringing more cargo into Russia than it is taking out of it, although in Moscow the trend is different, since so many companies have international connections, Krasnopolskaya said.

DHL has been in Russia since 1984, when it became the first express delivery company to enter the Soviet Union. TNT has been here since 1989.

Korbut said TNT is looking to move beyond its traditional corporate client base and focus more on attracting retail customers and recently signed agreements with government-owned Moscow Post and International Post to use some of their outlets in Moscow.

DHL signed a similar agreement with Moscow Post last year.

"Of course, our services are quite costly for individuals, but the number of people who can afford them is increasing," Krasnopolskaya said.

"The Russian postal system is far from being perfect," TNT's van Graafeiland said. "But we hope things will get better with our participation."