The benefit of forming e-commerce partnerships in the Asia-Pacific region

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Ian Kerr, founder and host of the Postal Hub Podcast, shares his thoughts on the recent e-commerce partnership between Australia Post and Dubai-based logistics company Aramex

In early June, Australia Post and Dubai-based logistics company Aramex announced their intention to enter into a joint venture targeting the global e-commerce market, with a particular focus on Asia.

The joint venture will build on the combined Aramex and StarTrack International global express delivery networks, with Aramex investing in StarTrack International and contributing toward marketing and sales.

According to Australia Post, the alliance will open emerging world markets to Australian businesses and online shoppers.

While there has always been competition in Australian domestic parcel deliveries, in recent years competition in cross-border parcels has intensified. Many of Australia Post’s competitors in domestic and international parcel deliveries have already formed global delivery partnerships.

Japan Post has bought Toll, while FedEx recently completed its acquisition of TNT Express. Singapore Post has acquired Couriers Please and has since taken a share in HUBBED, which delivers parcels via news agencies. In May this year, DHL opened a new and expanded international express facility in Canberra, timed to coincide with the introduction of international flights at Canberra Airport from September 2016.

With more and more posts and global parcel carriers expanding onto Australia Post’s home turf, the arrangement with Aramex sends a clear signal that the company won’t just sit back and let competitors pick off its growing e-commerce parcels business.

The Aramex/Australia Post joint venture will also have ramifications for the domestic courier market. Mail Call, the Australian courier company acquired by Aramex in 2014, will change hands again under the deal, becoming part of Australia Post’s StarTrack Courier business. At the time of the acquisition, Aramex said it was buying Mail Call for its intellectual property, particularly its timed delivery service.

There will also be interesting developments arising from Aramex’s acquisition of Fastway Couriers earlier this year. The carrier covers 85% of the Australian population and competes with Australia Post’s domestic express business. Fastway, which has 800 franchisees in Australia, currently has a partnership with big box stationery retailer Officeworks to provide delivery for its ‘Mailman’ parcel delivery service. Mailman competes with Australia Post on price and, it claims, convenience by virtue of Officeworks’ extended opening hours. It will be interesting to see how Australia Post’s new relationship with Fastway’s parent company affects this partnership.

In either case, Australia Post’s new arrangement with Aramex will help the company to capture more inbound e-commerce parcel volumes, as well as stimulate outbound international parcels growth. This could prove particularly attractive to smaller Australian e-commerce merchants, which typically deal with Australia Post as their shipping partner.

Bio:

Ian Kerr is the founder and host of the Postal Hub Podcast. Kerr has a deep knowledge of the Australian postal network, both in retail and delivery, through his many years working for the Post Office Agents Association Limited, the national association for small business owners in the Australian postal sector.

July 5, 2016

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