Poste Italiane has put a major new parcels hub in Bologna into operation to expand sorting capacity as its volumes continued to grow at high double-digit rates in the first quarter of 2019.
The Italian postal group said yesterday that the new hub has gone into operation with an initial capacity to process 125,000 parcels/day. The hub will be officially opened during the second quarter when it will be running at its full capacity of 250,000 parcels/day.
The facility will enable the company to cope with a continued strong rise in volumes as it benefits from e-commerce growth, including a delivery deal with Amazon.
In the first quarter, Poste Italiane’s parcel revenues increased by 15% to €201 million on a 19% volume rise to 35 million parcels. Revenues from B2C deliveries increased 35% y/y to €86 million as consumer parcel volumes surged by 31% to 21 million.
There was also strong growth for the small B2B parcel business, with revenues up by 17% and volumes by 18%. Average prices for parcels were down 4% in 1Q19, as result of a changing volume mix to B2C while tariffs were broadly stable for B2B and up for both B2C and C2C, the group noted.
In contrast, mail revenues declined 5% to €640 million on an 11% volume fall, although average prices were up 6% thanks to a positive volume-mix-effect as well as re-pricing on several products effective from July 2018.
Overall, the Mail, Parcel & Distribution division reported a 2.1% drop in quarterly revenues to €880 million. Its operating profit slumped 44% to €148 million on a reported basis while the adjusted loss broadened to €53 million, although this was “in line with expectations and on track with our 2019 target”, according to the group.
At an operational level, Poste Italiane made good progress with the ongoing switch to joint deliveries of mail and parcels. Nearly two thirds (64%) of targeted delivery centres are now operating under the Joint Delivery Model, in line to reach 100% coverage by the end of 2019.
In parallel, the agreement with the FIT network is accelerating the development of alternative delivery points of the PuntoPoste network. There are now 1,400 active alternative delivery points (up by 1,000 since December 2018) in addition to post offices, while FIT locations are now operational as a delivery option on the Amazon marketplace.
CEO Matteo Del Fante said: “We continue to accelerate our industrial transformation in 2019 to capitalize on future growth opportunities. The new, state of the art, parcel sorting centre in Bologna will add daily capacity of 250,000 parcels, while we continued to expand alternative delivery options for our customers. Our Joint Delivery Model is now running in 64 percent of delivery centres and we are well on track to reach full implementation by year end.”
Meanwhile, Poste Italiane has signed a memorandum of understanding to establish a joint venture with European digital freight forwarder company, sennder, focused on driving efficiency across the long-haul road transport through load optimization, reducing costs and CO2 emissions.
The JV, initially to be majority-owned by the postal group, will manage full truckload freight transportation services and is planned to start operations in the third quarter of this year. Berlin-based start-up sennder uses proprietary technology to organize long-haul transport with an efficient, smart and flexible approach.
The partnership “will also allow Poste Italiane to target transport demand coming from third parties inside and outside of Italy, to further benefit from economies of scale and technology optimization”. At present, Poste employs around 800 third-party vehicles for long-haul alone, making approximately 2,300 journeys and covering 450,000 Km on an average day.
Del Fante explained: “The initiative is part of the broader commitment taken with our Joint Delivery Model to modernize our fleet and further optimize our logistic value chain through advanced IT solutions, delivering cost efficiencies as well as reduced CO2 emissions."
In Q1, 2019, the overall Poste Italiane Group reported a 1.5% drop in revenue to €2.84 billion and a 12% fall in reported operating profits to €617 million but a 6% improvement in adjusted EBIT to €351 million. Both Financial Services and Insurance Services increased their profits.
Commenting on the group results, Del Fante said: “First quarter results demonstrate ongoing Deliver 2022 progress, with sustainable recurring revenue growth, cost discipline, as well as a continued reduction of Poste’s reliance on non-recurring items such as capital gains.”
