Brazilian postal operator ECT (Correios) yesterday launched a new next-day express deliveryservice after improving profits in 2011 and will take on more staff this year but has dropped plans
to set up its own air cargo operation.The new ‘Sedex 12’ service offers guaranteed next-day delivery by 12:00 to destinations in thestates of Sao Paulo, Minas Gerais, Rio Grande do Sul and Espirito Santo in a market test phase. Itwill be gradually rolled out in the rest of the country. Product features include three deliveryattempts, online shipment tracking and delivery notification.
It complements the existing next-day service ‘Sedex 10’, the same-day service ‘Sedex Hoje’, thee-commerce offering ‘e- Sedex’ and the international service Sedex Mundi. Correios, which launchedthe Serviço de Encomenda Expressa Nacional (Sedex) service 30 years ago, claims to be domesticmarket leader for express services in the vast country.
The e-Sedex product, offering home delivery of goods ordered online, generated strong growthlast year as a result of the boom in e-commerce in Brazil. Correios said it delivered 17.7 millione-Sedex shipments, a 36% rise on 2010, and generated revenues of R$225 million (€92 million), a 51%increase on the previous year. The product offering includes two delivery attempts per day, onlinetracking and return logistics.
The company claims to deliver 35% of all Brazilian e-commerce parcels (up to 30kg) and seesitself as the market leader ahead of 30 competitors in this segment. Total Brazilian e-commercerevenues grew by 26% to R$18.7 billion (€7.6 billion) last year, according to a report fromWebShoppers, and are predicted to rise to R$23.4 billion (€9.6 billion) this year.
Correios said that it invested some R$200 million (€82 million) in its operational capabilitieslast year to profit from e-commerce growth. This included more than 5,000 new vehicles and 10,000additional staff. The investments helped ensure good e-commerce deliveries last Christmas, itpointed out.
Meanwhile, Correios president Wagner Pinheiro told Brazilian newspaper Valor Economico in awide-ranging interview that the company improved profits last year to a record level and plansfurther investment this year but has scrapped plans to set up its own cargo airline.
Correios increased its net profit to R$883 million (€361 million) in 2011, which would have beeneven higher without the impact of a 28-day strike and extra payments to the government for previousyears, he told the newspaper. Results will be officially announced this month. In 2010, Correioshad revenues of R$12.7 billion (€5.2 billion), an operating profit of R$1.1 billion (€450 million)and a net profit of R$827 million (€338 million).
The company, with 115,000 employees, plans to take on 13,727 additional staff this year, mostlysorting and delivery workers, to cope with its growth and expansion of business activities.Pinheiro also said that the company plans to open or modernise eight cargo terminals this year,including at Sao Paulo’s two main airports of Viracopos and Guarulhos and at Brasilia.
However, long-standing plans to set up a subsidiary cargo airline are no longer on the agenda,Pinheiro stressed. “We completely reject this hypothesis,” he declared. Instead, the company wantsto ensure stable capacity from sub-contracted airlines with long-term contracts of 30 monthsinstead of just 12 months. A first contract was signed last November and a second has gone out totender, while six new nightly routes have been launched.
Correios uses eight different airlines for airlift capacity to fly mail and parcels across thevast country. The two major suppliers are Rio and Total, which account for about half the volumes,along with regional carriers Amazonaves, Air Brasil, América do Sul, Fretax, Trip and TWO. Therehave been scandals in recent years involving contracts with former airline partners Skymaster andMTA.
In terms of international growth, Pinheiro said that Argentina, the US and Portuguese-speakingcountries are the main targets and Correios wants to open representative offices in thesecountries.
