Russian Post and China Post plan to expand rail deliveries of international shipments from China to Russia and to start a regular exchange of postal flows between the two countries as part of a reinforced partnership agreement signed by the postal operators during an official visit of Russia’s president Vladimir Putin to China this month.
This is in line with the cooperation agreement between the railway operators of the two countries signed in May 2014 and aims to increase the product flow and trade between China and Russia. At the beginning of this year, Russian Post and China Post started rail transportation of international postal shipments from China to Russia and now plan to launch regular rail deliveries as part of cargo and passenger trains.
"Today, China and Russia are connected by four passenger train routes, and we have the possibility to link them to postal trains which will allow to deliver postal items within a short time,” said Vladimir Kalyapin, First Deputy General Director FPK (Federal Passenger Company), part of Russian Railways. “A passenger train from Beijing to Moscow takes six days, to Novosibirsk – two days."
The postal operators plan to ensure guaranteed delivery times of up to seven days for the joint logistics solution for shipments delivered from China to Russia. Goods from major Chinese internet shops will be consolidated at logistics sites in China, pre-sorted there and then delivered to post offices in large Russian cities. The coverage area, the method of labelling and other technical features will be determined by the partners before 1 November, 2015.
Currently, 90% of postal shipments from China to Russia are delivered by air and 10% by road. When delivering mail within Russia, however, rail deliveries account for over 50%.
“In the first half of 2015, Russian Post and Russian Railways carried out the first rail deliveries of postal shipments from China to Russia,” Alexey Skatin, Deputy General Director Russian Post, Logistics, said. “Testing the technology helped identify ‘bottlenecks’ and areas for improving the supply chain. Now, we are planning, together with China Post, Russian Railways and Federal Customs Service, to actively develop this area.”
Russian Post stressed that rail transportation will reduce transportation costs and additional cargo operations as well as exclude intermediaries from the supply chain.
“Shipping mail by rail at such distances is more economical than by air and by road and will certainly help us attract additional cargo to the Trans-Siberian Railway,” Victor Bortsov, Director Transport Development of Small Cargo Parts at Russian Railway Logistics, said. “In addition to mail deliveries, we are ready to provide the whole range of related services, including customs transit to any point of international postal exchange. I note that the service is extremely relevant today – the Universal Postal Union and the postal administrations of the European countries are also starting to consider such methods of mail transportation.”
Russian citizens are increasingly buying goods from online stores and international shipment volumes passing through the customs are increasing each year, Alexander Morozenkov, Deputy Director Customs Clearance and Customs Control at Federal Customs Service, confirmed. “Many of the world’s major players on the e-commerce market are located in China and the emergence of new channels for delivery of postal shipments from China to Russia will promote further trade growth and will help supply the country's population with quality delivery services,” he added.
"We are pleased about the active and fruitful collaboration with China Post. Today, more than 80% of incoming international mail items arrive to Russia from China, with the shipping volumes increasing by 1.5 times during the first half of 2015 compared to the previous year,” Russian Post CEO Dmitry Strashnov said. “I am confident that the joint work of Russian Post and China Post to optimise logistics routes and reduce delivery times will give an additional boost to the development of e-commerce and the trade growth between our countries."
“Russian Post is one of the strategic partners of China Post. In recent years, we have not only seen high growth in cross-border shipments but also the active effort of the Russian Post team to improve service quality and implement new services for customers,” China Post President Li Guohua stressed. “Together we are working on ways and methods to optimise the processing and delivery of mail to Russian consumers so they can get their orders from online stores even quicker.”
In the first half of 2015, Russian Post increased its revenues from sales of retail goods to RUB 7 billion (€91 million), with net profit rising 15%, compared to the first half of 2014. The growth trend is continuing: in June, revenues increased by 11% and net profit by 22%, compared to the same period last year.
The highest growth was seen in the following ‘postal’ product categories, the distribution of which has been prioritised since 2014: stationery, all kinds of postal packaging, postcards, newspapers and magazines. For example, revenues from printed editions increased by 3% in the first half year and by 19% in June, and from books sales – by 20% and 38%, respectively.
The increase in revenues from retail sales was achieved by expanding the range of products in the postal categories and more effective product placement in the offices. In addition, the successful implementation of the automated system 1C made it possible to efficiently manage inventory, ensure control and analyse business activities, including the area of postal retail.
"We have revised the concept of retail trade, terminated about a third of low-profit federal contracts, reduced the number of suppliers and in some cases moved to direct contracts with manufacturers,” Inessa Galaktionova, Deputy General Director for Postal Business at Russian Post, said.
