TNT plans to expand truck network

TNT Express, a major business-to-business express delivery company, has announced a $2.5 million expansion of its ground trucking network throughout the region.

The company said it will open new road hubs in the UAE, Bahrain and Saudi Arabia next year as well as an additional trucking facility in Kuwait.

TNT's non-document and road products are growing at 40 per cent each year and have significantly contributed to annual revenue growth of more than 30 per cent, said Mark Pell, TNT's managing director for the Gulf.

"It is widely anticipated that these growth rates will prevail for another three to four years," he said.

According to market analysts the expansion is part of a genuine growth stoked by the economic boom which in turn has spurred an increase in transportation activities.

"The same companies are serving the increasing volumes. They form a niche sector which has not expanded. For example, you may see a surge in new companies in real estate, property and so on, but how many new transportation companies do you see opening up?" said Dr Khalid Manniar, managing partner of AGN Mak, Dubai-based business consultants.

TNT will be focusing on improving its penetration across Gulf markets over the next five years, said Pell. "The expansion of our Middle East road network (MERN) will be critical in achieving sustained growth. We recently launched an industry first route to Iran from the UAE and we'll be servicing Syria, Lebanon and Jordan by mid next year by road. It is therefore vital that our ground infrastructure is upgraded to meet this development," he said.

According to Neelakantan Krishnaswamy, consultant at Morison (UAE) Consulting, there is still a lot of scope for growth in the sector.

"This is a response to the supply chain movement which is increasing tremendously in the region. Also there is a vast untapped African market waiting to open up which will augment the overall requirement of distribution from the region," said Krishnaswamy.

In the UAE, TNT will open a new MERN hub at the south of Jebel Ali Free Zone (JAFZ) in Dubai to process road shipments to Qatar, Saudi, Bahrain, Kuwait, Oman and Iran.

In Bahrain, TNT's immediate plan is to invest in an additional 1,500 square metres of warehousing and office space to accommodate an anticipated surge in business via Bahrain and from its Middle East road network.

"Through increased infrastructure investment, we are targeting a 40 per cent increase in business from the Kingdom over the next year, "said Ahmad Gamal, TNT country manager in Bahrain.

A new hub is planned in Riyadh early next year and in Kuwait there will be a new 1,000 square metre trucking facility to act as a base for shipments to Iraq.