By YOKE HAR LEE
The dot.com revolution is changing the way global companies run their business as they scramble to dramatically compress delivery times.
It has also put pressure on logistics companies to find faster and cheaper ways to transport goods, creating the need for expensive IT and human resource investments.
As companies race to supply services to mega-companies, logistics and postal firms are undergoing some of their most aggressive mergers and acquisitions in recent times.
Roger Piazza, president and chief executive of Emery Worldwide, told the Business Herald: "Our business is changing just about every day - but the subject remains the virtuality of the dot.com companies."
While dot.com companies could move information over the internet in real time, they had also found increasing need for reliable physical delivery systems.
Logistics companies had had to focus on innovative ways to deliver goods efficiently and faster as the world moved into real-time mode.
"If you have a real product, the problem remains how you are going to get them through.
"The recent Christmas season brought that to fruition - a company giving 60 per cent reliability is not enough.
"That enforces the need for good backroom operations."
Emery Worldwide is a $US2.2 billion ($4.5 billion) specialist mover of heavyweight goods.
It is a division of US-listed CNF Transportation Inc, a $US5.7 billion transport group based in Palo Alto, California.
Emery Worldwide has been in New Zealand since 1965 and has 55 local staff.
In 1998, it set up Priority Fresh, a joint venture with Christchurch-based freight company Goman Vernel International, to freight fresh produce.
This has contributed to the rapid growth of the local business.
The New Zealand operations have seen growth more than double in the past two years, and Mr Piazza expects this growth to continue over the next couple of years.
The company has just launched Gold Priority Express, which guarantees delivery of goods between the US and New Zealand within three business days.
In a presentation to the American Chambers of Commerce in New Zealand, Mr Piazza said only top-tier logistics companies would be poised to address complex IT and integrated service requirements.
"The consensus is there will only be three to five major companies per industry.
"Service providers will need a strong global logistics and information system capability to provide worldwide services for these mega-companies."
The supply sources of raw materials were shifting to cheaper producing countries, including central Europe and China, while companies were increasingly outsourcing or using contract manufacturing.
The significant transport and logistics companies would be those which could continue to reinvest in technology and human resources, said Mr Piazza.
His company has just invested about $US100 million in its IT systems to greet the new millennium and a further $US85 million in its sorting hub in Dayton, Ohio.
Globally, mergers, acquisitions and alliances were developing rapidly.
"There is consolidation going on.
"Fedex and Calibre together make a $US18 billion company; UPS made acquisitions making them a $US27 billion concern; Deutsche Post/Danzas and AEI make a $US28 billion business.
"There is a lot of synergy being created, but also a lot of fallouts when giants come together."
Mr Piazza said Emery Worldwide's focus was on growing its international business, which in 1989 accounted for about 25 per cent of the company's global business.
There was still growth to be tapped in the US, but the market was softer. "Growth in the international market is still there."
Because of the fragmentation, he said, companies in the business had no more than 2 to 3 per cent global share in their respective markets.
Speed is key to success in era of internet
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