Parcel firm TNT exports road approach to Asia

DUIVEN, Netherlands, Nov 26 (Reuters) Seeking to avoid the sky-high costs of flying, Dutch parcel firm TNT transports as many packages as it can by road in Europe, an approach it is busy exporting to Asia.

Key to the strategy is a complex road network, built up over 35 years, with the main hub in the Dutch town of Duiven, about an hour's drive from Amsterdam and close to the German border.

Across Europe, TNT has about 750 trucks on international routes every day, connecting a total of 101 hubs and international depots in 34 countries, said Ben Klaassen, managing director of TNT's European road networks.

The trucks drive to schedules like trains, departing to arrive at one of TNT's hubs and depots -- such as Helsingborg, Nuremberg or Paris Gare du Nord -- in time for parcels to be unloaded, sorted, and shipped out again or delivered locally.

A parcel from the Dutch capital Amsterdam with destination Copenhagen, some 800 kilometres away, will be picked up by a TNT truck in the afternoon, driven to Denmark overnight and delivered the next day.

TNT's bigger European competitor DHL, owned by Deutsche Post, also uses trucks on some routes, but says it usually uses planes to transport parcels for next-day delivery.

For urgent shipments across larger distances in Europe or across continents, TNT also uses a fleet of more than 40 cargo planes or buys capacity from airlines. The company -- the smallest of the big four express companies, behind United Parcel Service, FedEx and DHL -- says flying is about eight times more expensive than road transport.

ASIAN EXPANSION TNT is taking the same approach to Southeast Asia, where its routes in Malaysia, Singapore, Thailand and Vietnam will soon connect to its network in China, according to Onno Boots, TNT's managing director for the region.

''What we're doing here is exactly what we have been doing over 35 years in Europe. That has never been done in Asia, that's why it's unique, building a road infrastructure where everybody else has an air infrastructure,'' Boots said by phone from Singapore.

FedEx and UPS have large ground shipping networks in North America, but like DHL concentrate on express delivery by air in Asia.

TNT, meanwhile, is seeking a niche between fast-but-costly air transport and slow-but-cheap sea freight, which accounts for about two thirds of the intra-Asia market, Boots said.

''I am sitting in my office on the 20th floor, and I'm overlooking the harbour of Singapore here, and I see at least a thousand vessels waiting to get into the harbour. It's not all oil tankers, it's all kinds of freight vessels,'' he said.

By road, goods can be shipped from Singapore to Kuala Lumpur in a day, and to Bangkok in a day and a half, Boots said.

''We are able to offer a service that's about 30 percent cheaper than air and it's only half a day slower than air. That's competitive.'' IPODS, COMPUTERS, MICROWAVES Stretching over a much bigger area and working on more primitive roads, however, road transport in Asia lacks the geographical advantages of Europe, where key commercial centres -- such as Antwerp in Belgium or Germany's densely populated and industrialised Ruhr area -- are just a few hours away from the Duiven hub.

The hub -- at 22,000 square metres roughly three times the size of a regulation soccer pitch -- is a massive hall with over a hundred large doors on two sides to which truck trailers pull up to get unloaded and loaded again.

At 6 pm local time, it is already buzzing with activity, even though the peak time is hours away.

Fork lifts zip past with palettes of Acer computers, Samsung flat-panel televisions or Panasonic microwaves.

''This is an iPod,'' said Klaassen, picking up a small package from a stack about to go into a sorting machine, with its web of conveyor belts, in the centre of the hall.

An airport-style arrivals screen announces that at door 158, a truck from MI6 -- TNT's code for Milan -- is ready to be unloaded.

Due to arrive shortly at door 159 is a truck from NXH (Northampton in Britain).

Some 33 million kilograms of freight passed through the Duiven hub in October, and TNT's European trucks drive the equivalent of around the world more than 50 times a week.

Reuters SZ RS0846