Swiss Post’s new e-commerce services will help the company to expand its cross-border parcelsbusiness and strengthen the logistics division in a very competitive market, Dieter Bambauer, head
of PostLogistics, told CEP-Research in an interview.Strategically, PostLogistics, the CEP and logistics division of Swiss Post, aims to defendits domestic market leadership by expanding its B2C parcels business on the back of e-commercegrowth, grow its international business and extend its add-on logistics services for customers suchas warehousing and in-night express.
Last year the division had an operating profit margin of nearly 10 per cent, with EBIT of CHF152 million on revenues of CHF 1,535 million. But this was lower than 2011 when it had a 10.8 percent profit margin. The bulk of its revenues are generated from parcels, with volumes rising 4.1per cent to 111 million parcels last year, compared to just two million express shipments.
But although Swiss Post is the dominant B2C parcels carrier with a market share of more than70 per cent, competition is increasing as international parcel operators seek to gain a foothold inSwitzerland and build up their business. “We feel the competition and pressure on prices eventhough the market shares do not show this,” Bambauer pointed out.
DPD, for example, sees itself as the main competitor with a 10 per cent market share and 15million parcels a year, although these are mostly B2B deliveries. But it aims to expand its B2Cpresence through a network of 600 parcel shops and with innovative products such as the Predictinteractive notification services. DHL Express is also eying the market via its Servicepoints andlast year tested three ‘Servicepoint 24/7’ parcel terminals in Switzerland.
Their expansion plans are unsurprising given that the Swiss B2B market is only growing atabout 1-2 per cent a year, roughly equivalent to Swiss GDP growth. In contrast, the B2C parcelsmarket is growing by a strong 7-8 per cent a year thanks to the e-commerce boom, generating overallmarket growth of about 4-5 per cent a year.
Internationally, PostLogistics aims to position itself as an all-round logistics provider fordeliveries to Switzerland with a broad portfolio of freight and parcel services. Swiss Postcooperates with a network of international partners, including TNT Express for urgent items, GLSfor deferred parcels and Germany’s Hermes.
Bambauer, a former head of Schenker Switzerland and senior manager at Kuehne & Nagel,made clear: “We have a very strong network structure with our partners. We will not develop our owninternational network.”
Instead, Swiss Post will focus on developing service packages for Swiss importers andexporters, including e-retailers. Asendia, the international mail joint venture with La Poste,could support this approach with its sales network.
One area where Swiss Post sees itself strongly positioned with its expertise in exports fromand imports to Switzerland. “We want to expand our customs expertise,” he said. “We want to providefull transparency for international shipments.”
On Monday, Swiss Post announced a long-awaited e-commerce growth strategy, based around ‘high-double digit million Swiss franc’ investment in logistics and parcels facilities, MyPost24parcel terminals and more flexible delivery services, including evening and Saturday deliveries.
Bambauer said the company will invest about CHF 10 million in the YellowCube e-logisticsfacility at Oftringen in central Switzerland and a further CHF 30-40 million in expanding thecapacity of the parcel sorting centres at nearby Härkingen and at Frauenfeld, between Zurich andKonstanz.
Asked about the parcel terminals, he said Swiss Post is currently talking with potentiallocations such as large retail stores and universities. “We will decide in the autumn where toplace the terminals.” The company plans to install some 40 self-service machines by the end of nextyear and then gradually expand the network to some 200-250 self-service machines over the next fewyears, depending on how the new technology is accepted. This investment is likely to cost a highsingle-digit million euro sum.
Swiss Post already has a strong network of ‘alternative delivery points’ in the form of the3,000 post offices and other outlets, including the 700 ‘PickPoints’, which are parcel collectionpoints at locations such as train stations and petrol stations. However, these are relatively “simple” locations that will probably be gradually integrated into the MyPost24 network, Bambauersaid.
