Interview – Leading Greek parcel operator ACS grows despite economic slowdown

ACS, the largest courier company in Greece, has recorded good growth during the last few years,especially due to the booming e-commerce sector, but experienced a slight drop in shipping volumes

Regarding the latest developments in Greece related to shipments containing explosivesubstances, ACS said it was not affected by the parcel bombs. However, it has increased itsprecaution measures, in order to avoid similar cases.

ACS’ Operations Director Konstantinos Menegakis said in an interview at the Post-Expo inCopenhagen last month that the company was doing quite well despite the economic crisis as peoplestill need to send mail and parcels no matter the economic conditions. He admitted though that theshipping volumes were slightly down this year with an approximate decrease of 1% while last yearthey were down by about 2%. Menegakis stressed, however, that the company was doing better than theoverall express market.

Founded in 1981, ACS is a pioneering domestic courier service in Greece with the widest networkaround the country and an extensive shop network model, consisting of 300 shops. “Every day, weship 60,000 – 65,000 envelopes and parcels. Envelopes containing letters and small parcels accountfor 82-85% of our volumes. This also includes flyers, magazines and small books. While our biggestfocus is on envelopes, we have relatively recently started to switch to parcels because our mailvolumes are going down due to electronic substitution,” Menegakis stated.

ACS has benefited from growing distance selling and e-commerce in recent years generating goodgrowth for the company for goods shipped mainly to individuals including B2C home deliveries andB2B shipments. Parcel volumes in this sector increased significantly and are expected to continueto grow further over the coming years boosted by further development and penetration of theinternet in the Greek market and society, he said.

ACS said that goods and packages from online purchases are largely shipped through couriercompanies mainly because they offer significant advantages over traditional mail or other transportservices. These include direct next-day delivery with the relevant commercial benefits, track &trace and COD options as well as insurance for high-value shipments.

However, smaller companies often don’t provide these additional services in a proper way. “Smallcompanies provide a simple transportation service from one place to another at a cheap price. Ourprices are competitive with higher quality since we offer added value such as track & traceoptions and time-definite services and serve different customer groups including B2B or C2C. It’snot a problem for customers to pay for it,” Menegakis explained.

The Greek courier market including mail and parcels was estimated at €320 million for 2009 andis divided into two market sectors with international shipments accounting for one third of themarket in terms of revenues and domestic operations covering two thirds of the market. A total ofabout 48 million consignments were transported across Greece last year. Around 400 operators areactive on the market.

As the largest Greek courier company, ACS has a very strong position on the market with a shareof 27%. In 2009, it generated sales of €89 million and EBT of €5 million, according to Menegakis.The company did not have any bank debts last year, nor it has today, he stressed.

ACS’ main domestic competitors include local courier companies like Speedex with a 10% marketshare, Geniki Tahidromiki with 15%, Tahimetafores ELTA with 9% and many other small companies.

Asked in what way ACS distinguishes itself from the others, Menegakis answered: “We have a muchbigger network size in terms of sales points, a much more sophisticated infrastructure, especiallyIT, automated sorting, deliveries with PDAs, specialised customer solutions as well as a variety ofother different solutions and products. The ACS transportation network includes more than 70 dailycombined (road/sea/air) routes, with daily connections to all network positions from Athens butalso exclusive cargo flights to the main island destinations. The company is equipped with modernautomatic sorting machines and has a modern IT system infrastructure.

ACS provides courier and basic services to and from any point in Greece including a barcodewaybill, proof of collection and delivery and up to three delivery attempts. It offers a moderntrack & trace system with a password protected internet access for corporate customers. Interms of air transportation, it operates independent flights for bigger destinations. ACS alsooffers transportation by road and sea for shipments weighing 5-30 kg with additional servicesincluding COD and business insurance. In addition to regular express and parcel shipments, ACSoffers specialised express transportation for the healthcare sector including special sensitivemedicines, blood samples and infectious substances. It also transports high-value goods and carriesout home deliveries.

Compared to Greek Post, ACS provides competitive services with faster delivery and advancedcustomer update. Summarising the customer benefits when shipping with ACS, they can profit fromspecial procedures according to their needs, reliability, quality of service, low returns, track& trace option, secure delivery, insurance coverage and key accounts customer servicesupport.

On an international level, the company’s business is quite small with 500 parcels and envelopesper day. “For now, it’s not our priority to develop it. If you compare 500 pieces per day with65,000 domestic shipments, it’s a very small figure. International deliveries are quite costlysince we need to cooperate with the integrators who offer very high prices. In the same way we usetheir services for international deliveries, they are using our services for deliveries withinGreece including DHL, TNT etc,” Menegakis explained.

In terms of international delivery solutions, ACS Net Express provides express delivery withinGreece, to Cyprus, Albania and Bulgaria. ACS Europe 5 provides differed time delivery parcelservice at very competitive prices to and from countries of the European Union within 3-5 workingdays. For express deliveries all over the world, customers can use ACS World Express providing highquality service at competitive prices. The company also provides retail courier service andelectronic money transfer.

The company offers the widest national coverage with 300 ACS branded offices across Greece and50 in Cyprus, Albania and Bulgaria. It also provides service points in every town counting morethan 3,000 inhabitants. The company handles around 15 million shipments per year delivering to15,000 destinations within Greece and more than 2 million customer service phone calls. It operatesa fleet of more than 1,600 delivery vehicles employing 3,000 specialised staff.

“In terms of further investments, we plan to construct a new central hub / depot to transfer thecompany’s two central premises in Attica to one new larger building. We have found two possiblelocations for building the depot but we are still waiting for the government’s approval. Hopefully,we’ll have some good news by the end of this month,” Menegakis explained.

The new depot will feature a new automatic sorting system for envelopes and packages. There willbe about 1800 exits for envelopes and up to 80 for parcels with 2-3 destinations for each exit.“This way, we want to improve capacity, speed and sorting quality while also saving costs throughoptimising our operational processes. We will also transfer other central operations of the companyin Attica (apart from the offices) to these premises.” ACS’s two premises in Attica are located inthe Krioneri and Taurus areas. The new depot is expected to start operating in H1, 2012.

Looking ahead, Menegakis expects the company’s business to improve next year. “We do not see yetany signs of improvement but we expect a market consolidation in our favour due to the badfinancial position of our competitors in the domestic market. The government is trying hard toresolve the problems and the inefficiencies created over the last 40 years.”

“In terms of products and services, we continuously review our procedures to improvecompetitiveness but we are not planning anything new for now. It’s not necessary,” he said. “Ourmost important and popular service is the door-to-door delivery service for B2B shipments.”