Spanish state-owned postal group Correos aims to rapidly expand internationally through acquisitions and partnerships, according to a top executive.
The group is currently awaiting official approval by the Spanish government for its planned acquisition of a 51% stake in Portuguese parcels and logistics company Grupo Rangel, which is the local FedEx service partner. The Spanish group wants to create a pan-Iberian network able to deliver parcels throughout the two countries within 24 hours.
In addition, just last week the Spanish postal operator signed an agreement with Alibaba Group logistics subsidiary Cainiao Network and international e-commerce unit AliExpress to speed up parcel flows from China to Spain and to help Spanish SMEs to boost exports.
These moves in Europe and Asia are part of a bigger international growth strategy, Julio González García, the group’s secretary general, told participants at the Leaders in Logistics Post & Parcel Europe conference in Madrid yesterday.
In China, Correos has agreed a partnership with a local company to create a start-up in Southern China for parcel sorting activities, he disclosed. Another business is being created in Singapore.
“For us, it’s about going outside (Spain) or not being,” he declared. “We hope our actions in Portugal and Asia will be our first and second (deals) but not the last. This is very important for us. Spain is large but not large enough (for us).”
Correos took only four months to reach agreement over the Portugal deal and the China agreement should be achieved in a similar period of time.
However, as a state-owned company Correos is having to await official governmental approval for these activities, González García pointed out. “We need authorization to go outside Spain,” he explained.
Under new CEO Juan Manual Serrano, Correos wants to position itself as the clear leader in Spain for delivery of e-commerce parcels, including from Amazon with which it has just signed a new three-year delivery contract. The postal operator claims to deliver about 49% of all e-commerce parcels to Spanish consumers.
In 2018, the Correos Group delivered a record number of more than 165 million parcels, including a 61% surge in core network volumes to 106 million items. Express parcels -subsidiary Correos Express increased volumes by 16% to 59 million shipments.
The company delivers to homes and businesses across the country through a network of more than 30,000 postal delivery workers, has set up a network of 5,000 CityPaq parcel lockers and operates a network of 2,400 post offices.
Financially, the new strategy supports the target of making Correos profitable “in a few years”. The company had turnover of €1,784 million in 2018 and expects to grow by 10% to turnover of €1,966 million this year.
Correos invested €20 million to expand capacity of its logistics centres last year and will spend a further €37 million this year on a new facility at Madrid International Airport, due to go into operation in 2020.
