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TZ Limited Signs Delivery Giant TNT Express To A.D.A.M. Parcel Locker Network

TZ Limited (ASX: TZL) has formalised a teaming agreement with leading domestic and international express delivery company TNT Express, further building up its parcel distribution and on-line logistics network.

With an extensive Australian network involving about 5,000 staff and over 1,800 vehicles, TNT lends significant weight to the company's goal of generating parcel delivery flow to its A.D.A.M. Parcel Locker Network as it is rolled out across Australia.

Notably, it follows on the recent teaming agreement with Fastway Couriers, existing agreements with Temando and Toll Group as well as imminent first stage deployment of the Parcel Locker System.

TNT director special services Andrew Lysaght said that partnering with TZ allowed the delivery company to invest in a supply chain solution in the business to consumer market and fulfil customer parcel collection needs.

"It's a win-win for our customer and the end consumer. By using the A.D.A.M Parcel Lockers we're able to offer convenience and flexibility to our already-extensive suite of products and services," Lysaght said.

"The A.D.A.M Parcel Lockers reflect an effective business model that allows for increased operational efficiency and volume, whilst still placing customers' needs at the forefront."

TZ executive chairman Mark Bouris attributed the company's progress to its having built a good understanding of what the key stakeholders involved are looking for from property partners, carrier and logistics providers and consumers.

"We've learnt a lot over the course of the last year about establishing an alternative parcel delivery option in the market in support of on-line offer-to-fulfillment requirements," Bouris said, adding that he was confident the A.D.A.M Parcel Locker System would over time become the community network it envisioned.

"The interest and willingness of significant market players to want to collaborate and work with TZ to build this network is a truly exciting period in this Company's evolution."

TNT agreement

Under the terms of the teaming agreement, TZ and TNT will work together, initially under a trial program, to pursue opportunities to leverage the services provided by the A.D.A.M. Parcel Lockers with the delivery needs of TNT's customers.

Subject to the success of the program and mutual satisfaction, TNT and the Company may agree to negotiate in good faith an agreement for an ongoing relationship.

Analysis

Today's teaming arrangement with TNT Express adds a major piece to TZ Limited's rollout of the A.D.A.M. parcel lockers for consumers. (Express is the second largest player in the B2B express market in Australia with a 19-20% market share and a significant player in the B2C delivery market given an extensive domestic network in Australia with 5000 staff and over 1800 vehicles).

It also adds another significant piece of the puzzle needed to build a successful parcel distribution and on-line logistics network that could not only go head to head with Australia Post but take it past the postal company given TZ's "agnostic" delivery logistics system enables deliveries from any company.

Previous agreements had already covered possibly more than 60% of parcel deliveries in Australia while the company has locked in initial locations for its A.D.A.M. Parcel Locker System and has identified potential sites for the next stage of development.

TZ had this morning entered a trading halt ahead of a planned capital raising. The latest TNT announcement should add signficant impetus to the next 12 months for TZ. We continue to affirm our estimate of "intrinsic value" of TZ is closer to double the current market valuation.

TZ Limited will be presenting at the Proactive Investors One2One Forum in Sydney on 4 June 2013. Click HERE to register.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.