The author is a Moscow-based freelancer who specializes in transport issues.

The express-delivery services market started to develop in Russia with the arrival of DHL in 1984, joined by UPS and TNT in 1989 and by FedEx in 1990. As things stand today, these four companies have established their presence on the market and actually control it. Russian companies, like EMS Garantpost, control only 8-9 percent combined.

Despite all the fast-paced developments that have taken place over the last six years, which have involved both foreign and Russian companies, the Russian market of express-delivery has not been given enough attention by business and investment analysts yet. At the same time, it is vitally important for market participants to have comprehensive and reliable information about all companies involved. Therefore, there is a need for independent analyses, research and prognostication, especially as representatives of companies operating on the market demonstrate reluctance to disclose information, saying that such indicators as market volume and its segmentation represent commercial secrets.

The latest research on the Russian market for express-delivery services was conducted by Research International on orders from DHL two years ago. According to its results, DHL controls 51 percent of the market, while UPS and FedEx control 10 percent and 7 percent, respectively. No exact data were released on the market's volume, but some papers estimated it to be $60 million. Market participants maintain that the market is not being studied simply because there is no need for such studies. The market, they explain, is not a stormy river with rapids, but a quiet lake with transparent waters where every fisherman knows every fish by sight.

The international companies operating on the market make no secret of that the most lucrative part of their business here is export. Clients are mostly corporate entities; the share taken by individuals is as small as 4-5 percent. The market's most lucrative segment – Russian divisions of large international companies – had been divided up in the early stage of the market's development. It is probably due to this that the last arriving giant, FedEx, is not showing strongly, while DHL, which came first, controls the biggest share of the market. TNT, another international company, has virtually no presence in the market.

The market is expanding and changing, which is caused by both the general economic growth and certain specifically Russian factors. This year the market grew by approximately 30 percent and has undergone some structural changes.

"This year has seen both an overall growth and a sharp increase in the proportion of parcels and messages, which has nearly doubled," DHL Marketing Manager Irina Krasnopolskaya said.

Even TNT, which specializes in deliveries by automotive transport, recorded some growth this spring thanks to the introduction of new customs rules that caused logistical problems, forcing a number of export/import companies to pay express-delivery rates to avoid costly delays.

"At that moment, many clients chose to shift from traditional shippers to TNT just because they found it profitable. Now the situation has changed and, having won in the year's beginning, TNT is losing toward the year's end," said Ivan Shatskikh, the head of UPS' Russian division.

What tendencies can be expected on the Russian market for express-delivery services and how will the market develop?

First, the major foreign companies that currently operate on the market will work to develop full-fledged logistics chains like they have in Europe and in America. UPS is completinmg acquisition of logistics company Fritz. According to Shatskikh, UPS is acquiring Fritz with the aim of providing its customers with a wide range of delivery services – from small parcels to huge containers weighing several tons. Unlike in many European countries where express-delivery companies perform a wide range of functions, including even that of state postal service, in Russia the market is limited to corporate services primarily.

Domestic companies will probably develop as well. At this moment, there are some 70 Russian companies – though all are quite small – operating on the market.

According to EMS Garantpost Marketing Manager Irina Kulagina, competition on the Russian market for express-deliveries is limited to price competition because speed of delivery is similar in all companies. In this situation, small and flexible companies may get an advantage over bigger ones.

"We do not compete with the small shipping companies," TNT Marketing Manager Yelena Silvester said. "There is a vacant niche in the market and we are aiming to fill it."

Another tendency currently seen on the market is the development of cooperation between express-delivery companies and e-stores. "In Europe, 55 percent of goods bought via the Web are delivered by UPS," Shatskikh said. "In Russia, however, this line of business is not so widely developed at this point in time."

According to Silvester, most e-stores in Russia are using ordinary postal services to get their goods delivered to customers, but clients have begun to appear in this segment of the market, for example, the Sony e-store and the Ozon bookstore. "We consider this line of business to be very promising and effective," Silvester said. "It will develop with the growth of people's incomes."

This represents a perfect niche for express-delivery companies.

The business of express delivery is developing, and there will be room for it as long as people need to get objects from one place to another.