Spanish express and parcel delivery operator Nacex has recorded a drop in shipping volumes buthas been less impacted by the economic slowdown than the overall transport business due to its main
focus on the IT and healthcare sectors, a senior manager told CEP-Research.Due to the economic crisis, shipment volumes recorded a low single-digit drop in the lastfinancial year (October 2009 to September 2010) which is still much better than the overall declinein the Spanish market, Paul Kil, the company’s international manager, told CEP-Research in aninterview. “We’re not as much impacted by the economic slowdown in Spain as other companies becausea big part of our customers are companies that need guaranteed deliveries no matter the economicconditions,” he said.
In the financial year 2009, Nacex recorded a small revenue drop to €226 million. “Our domesticbusiness declined due to the difficult situation in Spain,” Kil explained.
Consistent with the economic environment, the company did not raise its prices in 2010 andextended the 2009 tariffs to this year. “Instead of reducing our prices, which was the overalltendency on the market, we maintained them but improved the service. We said to ourselves: insteadof doing it cheaper, we can do it better. For example, it makes a difference for the hospitals ifthey get their medicine one hour earlier meaning by 12 pm rather than 13 pm. The hospitals make up15% of our volumes. They won’t switch to another provider for money but for quality, so we chose toimprove our quality,” Kil said.
“In general, our customers are willing to pay more for value-added services like faster deliverytimes and track & trace options. But there are a few companies who ask us to reduce our prices.We don’t do that, however. We would rather improve our services than go down in price,” hereiterated. “Whether customers ship with us or not depends on their products. If the product is notso valuable or doesn’t require any particular added value service they don’t mind sending it with acheaper provider. But if it’s more expensive, they don’t want it to get damaged and when theyrequire urgent delivery, they turn to us.”
In line with its strategy focusing on quality improvement, Nacex has launched various newservices this year. Further improving its delivery times for express shipments, the companyachieved a 1 hour reduction for its 13:00 Express service which has become ‘12:00 H Express’. Nacexsaid this has been made possible thanks to a high level of investment in technology in its hubs,transport and communication systems, as well as the commitment of all its franchises.
In addition, Nacex has created a new rigid envelope for shipping urgent documentation weighingup to 1 kg. The service called ‘Doc’s’ allows customers to send their documents to Spain, Portugal,Andorra, Gibraltar and the islands including the Balearics, Canaries, Azores and Madeira with allthe advantages of the company’s wide portfolio of services.
Looking ahead, Nacex expects the business to go up again as the unemployment rate is going downwhile exports and imports are increasing. “There are signs of improvement but they are quiteminor,” Kil said. For the overall Spanish express market, he predicted a decline until May/June2011.
On the international level, Kil forecasted strong growth, especially in import shipments. “Today, many customers in Europe need quality as they are overcoming recession and many of them areswitching from traditional integrators to local quality leaders. We provide a better service thanthe integrators, for example delivery within 24 hours which they don’t. Quality is now moreimportant than the price,” Kil claimed.
In the future, Nacex aims to expand its customer base and target new areas. “The mail and thepackage market is declining due to e-commerce, decreasing number of airline tickets while moredocuments are sent by internet. Therefore, we are shifting our focus towards shipping heavierparcels and we need to switch to e-commerce, especially B2C. In Spain, the B2C market is very smallcompared to other European markets,” he said.
In the last few years, Nacex has strongly invested in technology and the company’s structure toimprove its operations and put new products and services on the market. This has contributed to theautomation of selection processes at platforms and better access for customers to information abouttheir shipments via internet, consolidation of management and distribution routes and bettercustomer service.
To further expand its e-commerce activities, Nacex has launched a new door-to-door service foronline retailers in June this year called ‘e-N@cex’ providing complete online tracking, return serviceand a pre-notification per e-mail or via sms, among other features. This product simplifies alltools that customers need so they don’t have to spend their own resources and can devote theirentire attention to their business. Nacex said this is a special product for companies operating anonline shop or using internet as one of their sales channels.
Nacex has an extensive network with over 310 branches throughout Spain, Portugal and Andorra andoperates 29 distribution hubs in Spain and Portugal. It has a fleet of 1,260 delivery vehicles andemploys 2,240 staff.
