SPSR Express, one of the largest Russian express delivery companies, is successfully tackling therecession with new services, cost control and enhanced technology, general director Vladimir
Solodkin told CEP-Research. New international partnerships are now on the agenda.The private express company is less impacted by the severe financial crisis in Russia thanother companies with a more moderate drop in volumes and revenues, he said in an in-depth interviewat the recent Post-Expo in Hannover. Shipment volumes of Russian companies have droppedconsiderably by about 25% on average this year, but SPSR has managed to restrict its volume declineto about 10%, he stated.
Offering delivery of documents, packages and freight, the company (also known under itsRussian abbreviation of CPCR Express) has expanded rapidly from its creation in 2001 withdouble-digit growth rates, including a 30% increase last year. The operator, with some 3,000employees, has extended its network to 119 branches and 80 offices across the country.
“We estimate our market share at about 22%,” Solodkin said. “We consider ourselves as aleading operator on the Russian express delivery market offering guaranteed services at anaffordable price and don’t have any serious competitors among the Russian companies.”
SPSR has improved operational efficiency this year by centralising financial administrationand is enhancing its handling and IT systems. “We are working hard on the optimisation of ourtechnology processes. As a matter of fact, we are the first Russian private company to incorporatean automated sorting chain. In a way, we have profited from the crisis as certain problems havebecome obvious, especially in terms of sales management and services and we are making a big effortto resolve them. That’s why we are now trying to increase our revenues by improving our services.During the crisis, we have multiplied our production capacity,” Solodkin explained.
At Post-Expo, the company held talks with potential suppliers of IT technology. “At thistrade fair, we are looking, in particular, for programme solutions to further optimise our businessprocesses. We are cooperating with certain companies not only for delivery purposes but also toobtain new technology that can make life easier for us and considerably improve the service qualityfor our customers, this is highly important for us.”
Meanwhile, SPSR has extended its geographical coverage with the opening of several newbranches in the CIS countries. “We have a total of 200 branches in Russia representing the largestprivately-owned branch network in the country among express operators. We have now got a customerbroker license and the main reason why we are here at the Post-Expo is that we plan to expand ourpresence to other international markets,” Solodkin said.
“For the moment, we work together with our international partners. However, we have noimmediate plans to open our own offices in other countries as the branch network is alreadysufficiently developed so we won’t be able to contribute anything particularly new. The majority ofour partners are based in the CIS countries and we are currently in negotiations for newpartnerships in Western European countries. We work together with the big four,” Solodkin revealed.
Despite the economic crisis, SPSR has launched some new products this year, one of them beingdirect mail. “In this sector, we are even taking away shipment volumes from Russian Post in termsof addressed or unaddressed mail. We have quite successfully implemented the service in severalRussian cities and its share continues to grow. There is a big demand for it among customers. Thisis a very challenging task to serve 10 million citizens with information and I think we succeededin doing so while providing a comparable service to Russian Post with at least the same quality,”Solodkin continued.
In addition, SPSR has introduced customs clearance and expanded its business in specialdelivery services. The new SPSR Express Envelope service offers fixed-price delivery of documentsbetween 89 regional centres and includes courier pick-up. Future plans include new parcel servicesas a 3PL provider.
In August, the company signed a partnership agreement with Aeroflot Cargo under which it willincrease its volumes on the Russian carrier’s flights. It will thus benefit from fastertransportation to distant regions and shorter overall delivery times.
According to the company’s business plan, SPSR plans to increase its revenues this year. “Even though the first half year of 2009 was rather weak, we can already see a real improvement inthe second half year with our revenues and shipment volumes growing,” Solodkin said optimistically.“It is difficult for us to plan ahead, and the last quarter will be the decisive indicator for thedecisions next year. The market will grow more slowly. We have prepared well ahead for the crisisand now we are profiting from it.”
Solodkin clearly sees some positive aspects of the crisis. “The good thing about the crisisis that it makes you think hard, take quick decisions and this flexibility allows us to staycompetitive on the market.”
