Blue Dart : Quick fix

News Clip : Business India,

14 - 17th October, 2002

- Shrikant Modak

Two months back there was immense speculation (reported in our 5 August issue) about Blue Dart's future. Its split with FedEx was imminent. To everyone's surprise it recently signed a five-year sales alliance with DHL Worldwide Express

Only in August there were serious questions about the future of Blue Dart's international business, subsequent to an imminent end to its 19-year courtship with US-based express logistics company FedEx. Its contract with the latter was ending in September and, by all accounts, negotiations weren't progressing smoothly. To everyone's surprise MD Clyde Cooper conjured up a five-year alliance with FedEx rival DHL Worldwide Express beginning 1st October 2002.

Cooper says, "The alliance immensely suits us given our strategic focus on the courier business in the domestic Indian market and in the Saarc region". Blue Dart was earlier tied up totally by FedEx for all its international business. FedEx on the other hand had forcefully negotiated full freedom for itself to expand its marketing activities in India independently of the former, in its earlier contract in 1997. This had become a bone of contention between the two when the negotiation for renewal started in the current year. While FedEx was willing to offer improved financial terms, it wasn't willing to relent on the exclusivity clause tying down Blue Dart.

Although Blue Dart is still tied down in routing its client's needs for outbound courier service through DHL, in its new contract it has acquired a freedom to accept India- or Saarc bound courier business from any of the other international companies. What are the financial terms? These are confidential. However, Cooper says,"the deal is good." Whatever they may mean, there is also a flexible trademark arrangement that allows Blue Dart to carry DHL branding at all of its outlets and vice-versa. As far as DHL is concerned, its area director Bryan Jamison is only too happy to hook on to Blue Dart's domestic client base of 30,000-plus. A third of these, according to Blue Dart sources, routinely ask for an international courier service. In turn, Blue Dart gets unfettered access to DHL's 250 Fortune 500 clients that operate in India.