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Freightways' Australia Post Deal To Increase Market Share

Fuseworks Media
Fuseworks Media

Wellington, Sept 2 NZPA - Freightways will deliver parcels in this country for Australia Post, which will increase its market share as the business was previously with rival CourierPost.

Freightways' managing director Dean Bracewell said Australia Post was the biggest parcel mover in this part of the world, and like all postal operators was moving more and more into the international package industry.

"To be aligned with them at a time when they are the forefront of pushing into the international express package industry is great because we will get their growth," he said.

Australia Post previously used CourierPost, a joint venture between NZ Post and DHL.

"It is a fairly key move to move away from the domestic postal provider," he said. "It certainly adds to our market share."

Australia Post would immediately become a major customer of Freightways, providing volume in line with other major customers.

Australia Post's international inbound express mail service (EMS), air parcels and courier product will be carried by Freightways subsidiaries DX Mail and New Zealand Couriers.

The use of DX Mail's international mail centre at Auckland Airport would enable the easy flow of Australia Post's international inbound EMS and air parcel product into New Zealand, Mr Bracewell said.

Australia Post customers would have seamless tracking of international products from the point of pick-up overseas to final delivery in New Zealand.

The move comes a day after Toll NZ entered the express parcel market with its brand Toll IPEC. The market is dominated by Freightways and CourierPost.

Forsyth Barr said in a research note that the economics of the Toll IPEC move did not stack up and a more logical way into the small express parcel market for Toll would be to take over Freightways.

Freightways has a market capitalisation of around $463 million and an open share register.

Toll NZ has under performed for years in freight forwarding.

Forsyth Barr also doubted the cross selling argument used by Toll. It said Mainfreight and Freightways worked well together.

There was a logical reason why Freightways and NZ Couriers dominated the market.

"That is because there are real barriers to entry," Forsyth Barr said.

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