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2014CORPORATE

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MARKET FLASHA fortnightly newsletter covering the latest news from the global postal sector

Issue 487

05 June 2014

in this issue

TOP sTORy• Consumersurgebrandstousemailand

AmERiCAs• CanadaPostsegmentreportsloss

beforetaxinfirstquarter• Dimensionalpricingchangeexpectedto

boostyields,FedExconfirms

AsiA PACifiC• Diversificationande-Commerce

deliverystrategybearfinancialfruitforSingPost

• Alibabainvestsin‘landmarkcollaboration’withSingPost

• AlibabalaunchesAustraliaPostpartnershipontheheelsofSingPostdeal

• BlueDartachievesdouble-digitrevenuegrowthinJanuary-Marchperiod

• UPSopenscontractlogisticsdistributionfacilityinChina

• UPSopensnewairhubinTaipei

EuROPE• DHLextendsEurapidservicenetwork

acrossEurope• DPDlaunchescross-borderparcelshop

services• GLSDenmarkstartsconstructionof

new€6mdepot

• Frenche-Commercesalescontinuedouble-digitgrowthinQ12014

• LeGroupeLaPostelaunchesStart’inPostservice

• Studyone-Commerceandlogisticsreleased

• DeutschePostDHLconfirmsshortandmid-rangetargets

• trans-o-flexlaunchesGermany-widenetworkforactivetemperaturecontrol

• PosteItalianesettofloatasTNTPostItaliare-brands

• POSTLuxembourgGroupreportsonstableturnoverin2013

• PostNLdevelopshomedeliveryserviceforfreshfoodboughtonline

• TNTExpresscompletessaleofTNTFashion

• SwissPostannouncesquarterlyresults• Fullrangeofservicesforonlineretailers

withYellowCube• RoyalMailpublishesfull-yearresults• RoyalMailGroupannouncesnew

Sundayservices• HermesopensUKhubtospeedup

growth• UKMailinvestsingrowthasprofitsrise• ZalandousesHermesUKparcelshops

fordeliveriesandreturns• CitySprint’srevenuesandprofitsrise

strongly

COnsumERs uRgE bRAnds TO usE mAil And EmAilRoyalMailGroupreleasedtheresultsofresearchonconsumerpreferencesregarding the use of different communication channels. According to theresearch, consumers are urging brands to use both mail and email tocommunicatewith them.Research found thatconsumersareveryclear thatmailandemailhavedifferentqualitieswhichmakethemsuitedtodifferenttypesofcommunication.Halfofpeople(51%)surveyedsaidtheyprefercompaniestouseacombinationofbothmailandemailtocommunicatewiththem.

Thefindingsshowthatmailcreatesstrongeremotionalengagementbetweensenderandrecipientwiththemajorityofpeoplesurveyedsayingthatmailgrabstheirattention,givesabetterimpressionofthecompanyandmakesthemfeelmorevalued.Meanwhileemailsareconsideredgoodforfollow-upandeasytofile.

InfurtheranalysisoftheInstituteofPractitionersinAdvertising(IPA)databankcommissioned byRoyalMail, independentmarketing consultantPeter Fieldrevealedthatcomplementingmarketingcampaignswithmailpays.Hisstudyfound that 27% more campaigns that delivered high sales performanceincludedmailthanthosethatdidnotincludemailinthemix.Inaddition,40%morecampaignsthatdrovehighacquisitionlevelscontainedmailthanthosewithoutmail.

Source:RoyalMailGroup

> TOP sTORy

• CanadaPostsegmentreportslossbeforetaxinfirstquarter

• Dimensionalpricingchangeexpectedtoboostyields,FedExconfirms

AmERiCAs CAnAdA POsT sEgmEnT REPORTs lOss bEfORE TAx in fiRsT quARTERThe Canada Post segment reported a loss before tax ofCA$27mforthefirstquarterof2014asTransactionMailvolumesdeclinedby6.9%andasDomesticParcelvolumesgrewby4.9%.Together,thedeclineinbillsandstatementsbeingmailedandthegrowthdrivenbyonlineshoppingreflectCanadians’continuingshiftintheuseofpostalservices.

Inthefirstquarterof2014,parcelrevenuefortheCanadaPostsegmentincreasedbyCA$23mor7.1%.CanadaPostis the market leader in providing business-to-consumerdelivery of packages, and the first-quarter results reflectsthecontinuingstrengthofitskeyroleinenablingthesuccessof the fast-growingonline retail sector.DomesticParcels,the largest product category, continued to show positiveresultsasrevenueincreasedbyCA$14mandvolumesgrewbymorethan1.2mpieces,or4.9%,comparedtothesameperiod the prior year. Transaction Mail is mostly letters,bills and statements. TransactionMail revenue decreasedbyCA$50m,or6%,inthefirstquarterasvolumesfellby79mpieces, or6.9%.A new tiered pricing structure forLettermail that better reflects the cost of serving variouscustomersegments tookeffect31March,after theendofthefirstquarter.It isexpectedtohaveapositiveeffectonTransactionMailrevenuegoingforward.DigitalalternativesarealsoaffectingCanadaPost’sDirectMarketingbusiness;revenue in the first quarter of 2014 fell by 4.9% whilevolumesfellby3.2%.

TheCanadaPostGroupofCompaniesreportedalossbeforetaxofCA$37minthefirstquarter,comparedto a profit before tax of CA$51m in the sameperiodof2013.TheGroupofCompanieswouldhavereportedalossbeforetaxofCA$58minthefirstquarterof2013haditnotbeenfortheCA$109m gain from the sale of the downtownVancouverMailProcessingPlant.

Source:CanadaPost

dimEnsiOnAl PRiCing ChAngE ExPECTEd TO bOOsT yiElds, fEdEx COnfiRmsPlans to extend dimensional weight pricing to all FedExGroundshipmentsareexpectedtoimproveyields,revenuesandprofits.

Analysts believe introducing a volumetric element inshipmentpricingcouldaffectupto30%ofFedExGround’ssmallershipmentsandleadtopriceincreasesofonethirdonshipmentsoflow-densitycommodities.

Currently, FedEx Ground applies ‘dimensional weightpricing’ only to packagesmeasuring three cubic feet (85litres)orgreater,butfrom1Januaryitwillapplyavolumetriccomponenttoallshipments.ItsaidthechangewouldalignFedExGrounddimensionalweightpricingwiththepricingmethodologiesusedbyFedExExpress.

Source:CEP-Research

ASIA PACIFIC• Diversificationande-Commerce

divERsifiCATiOn And E-COmmERCE dElivERy sTRATEgy bEAR finAnCiAl fRuiT fOR singPOsTE-commerce-related delivery and logistics contributedsignificantlytosolidfull-yearrevenueandprofitgrowthforSingapore Post (SingPost) in the face of the continuingdecline in its traditional postal business. SingPost’se-Commercedeliveryandlogisticsactivitieshavegrowntomorethan25%ofthegroup’sbusinessasaresultoffurtherprogress in its diversification plan to become a regionalend-to-ende-retail serviceshub, thecompany revealed initsfourthquarterand2013-14financialyearreport.

Reported group revenue grew 5.9% toSGD193.3minthefourthquarter,“boostedbythefullconsolidationofnewsubsidiariesand the growth in e-Commerce relatedbusinesses”.Excludingcontributionsfromnew subsidiaries, the group recordedorganic revenue growth of 3.0%.Full-year revenues were up 24.6% at

SGD821.1m.Netprofit increased 17.7% toSGD30.7m inthefourthquarter,andforthefullyear,increased4.8%toSGD143.1m.Excludingone-off items,underlyingnetprofitdeclined1.3%toSGD31.4minthefourthquarter,whileforthefullyearitincreased2.9%toSGD145m.

SingPost’s domesticmail volumes continued to decline inthefourthquarter,withthefullyearregisteringareductionof1.3%.However,overallrevenueforthegroup’sMailbusiness

grew6.6%toSGD123.4minthequarter,attributedto“theincrease in regional e-commerce transhipment businessand inorganic improvement in direct mail revenue fromSamplestore”,whichSingPostacquired inOctober2013.Forthefullyear,Mailrevenuerose11.5%toSGD491.0m.Logisticsrevenuegrewby9.9%toSGD79minthefourthquarter and by 52.8% toSGD368.5m for the year as awhole,mostlyduetoseveralacquisitions.

Source:CEP-Research

AlibAbA invEsTs in ‘lAndmARk COllAbORATiOn’ wiTh singPOsTE-Commerce giant Alibaba Group has agreed to buy a10%stakeinSingaporePostinwhatitcalleda“landmarkcollaboration between two leading organisations”, as thegroupsalsoenterednegotiationstoestablishaninternationale-Commercelogisticsjointventure.

Under the strategic agreement, Alibaba Investment Limitedwill investSGD312.5m (€183m) to purchase30mexistingordinarysharesheldbySingPostalongwith190mnewordinaryshares,takinga10.35%stakeinSingPostuponcompletion.

Both companies have also signed a memorandum ofunderstandingthatwillallowthemtodiscussandnegotiate,overthenext12months,ajointventureforthebusinessofinternationale-Commercelogistics.

Source:CEP-Research

AsiA PACifiC

AlibAbA lAunChEs AusTRAliA POsT PARTnERshiP On ThE hEEls Of singPOsT dEAlChinesee-CommercegiantAlibabaGrouphasunveiledapartnership with Australia Post in what is the company’ssecond collaboration revealed recently with internationalpostaloperators.

The partnership with Australia Post complements anagreement to buy a 10% stake in Singapore Post,announcedearlierthisweek,inwhichAlibabaandSingPosthavealsoenterednegotiationstoestablishaninternationale-Commercelogisticsjointventure.

Although the details of the Australia Post partnership arelimited to date, it is understood that it will create a newavenue for Australian small andmedium-sized companiesto access Alibaba’s Tmall.com shopping platform, one ofChina’slargestB2Conlinemarketplaces.ItwasunclearatthetimeofwritingwhetherthepartnershipcovereddeliveryandlogisticsorwhetheritwasmerelyusingAustraliaPostasacommunication,administrativeandmarketingchannel.

Source:CEP-Research

bluE dART AChiEvEs dOublE-digiT REvEnuE gROwTh in JAnuARy-mARCh PERiOdDeutsche Post DHL’s subsidiary in India, Blue Dart,achieveddouble-digitrevenuegrowthintheJanuary-March2014quarterdespitethesloweconomy,butsawdivergingprofit trends. Blue Dart increased revenues by 12.9%to INR5,029m (€63.1m) in the January-March quarter

of 2014, but operating profits weakened to INR493m(€6.2m)andnetprofitsweredowntoINR306m(€3.8m).

The company’s sales for the April 2013 to March 2014business year totalled INR19.3bn (€242.5m). OperatingprofitscametoINR1.9bn(€23.5m)andthecompanyposteda net profit of INR1.2bn (€15.6m). These figures are notdirectlycomparabletothepreviousyearwhenBlueDarthada15-monthfiscalyearcoveringJanuary2012toMarch2013.

Thecompany,whichis75%ownedbyDHL,handledover126.4mdomesticshipments,0.91minternationalshipmentsandover513,474tonnesofdocumentsandparcelsintheyearending31March2014.

Source:CEP-Research

uPs OPEns COnTRACT lOgisTiCs disTRibuTiOn fACiliTy in ChinAUPS today announced the opening of its new contractlogisticsdistributionfacilityinBeijing.The6,500m²ofnon-bondedwarehousespacelocated19kmfromBeijingCapitalInternationalAirportservesgrowingdemand inChinaandiscapableofservicingcontract logisticsorderswith four-hourdeliverywithinthemetropolitanBeijingareaandnext-business-dayordersformajorcitiesthroughoutChina.

Theopeningof theBeijing facility followsclosely after theopening of similar UPS distribution centres in Chengduand Shanghai in 2013. Together, the centres supportgrowing industries in China, including high-tech, industrialmanufacturing, aerospace and retail. Capabilities of thesefacilities include order fulfilment, inventory management,

kitting,packagingandotherspecializedvalue-addedservices.

Additionally,UPShasexpandeditspost-salesservicesinChina.Thisnetworknow provides same-day critical parts delivery within the metro area in 87citiesthroughoutChina.Inadditiontoopeningthenewfacilities,UPShasalsodeveloped its gateways in central andwesternChinawith flights connectingChengduandZhengzhoutotheextensiveUPSglobalnetwork.WithdedicatedhealthcarefacilitiesinHangzhouandShanghai,UPShasfurtherenhanceditscapabilitiesinservingtheneedsofhealthcarecustomers.

Source:UPS

uPs OPEns nEw AiR hub in TAiPEiUPS today announced the official opening of its newly relocated TransPacific Hub at Taiwan Taoyuan International Airport. Situated at theairport’sAirCargoTerminalLogisticsWarehouse,thehuboccupiescloseto82,000squarefeet,a40%increaseinsizefromitspreviouslocation.ThehubisequippedwiththelatestsortingcapabilitiestosupporttheneedsofTaiwanesebusinesseslookingtotradeglobally.

TheopeningofthehubisUPS’slatestinitiativeinbuildingastrong,integratedairnetworkacrossAsia,connectingTaiwantokeymarketsinAsia,EuropeandtheUnitedStates.Thehuboperates28weeklycargoflightsconnectingTaiwantokeyglobalmarkets.Leveragingthisextensivenetwork,customerscanexpectaone-totwo-daydeliverycommitmenttomajorcitiesintheUSandEurope.

Source:UPS

EUROPE dhl ExTEnds EuRAPid sERviCE nETwORk ACROss EuROPEDHLFreighthasexpandeditsEurapidserviceacrossEuropewith11newterminalsjoiningthenetworkatthebeginningofMay.Theday-definiteserviceforless-than-truckload(LTL)shipmentsupto2.5tonnesisnowavailableat41terminalsandcovers75%ofallbusinessaddresses inEurope.Thecompanyislookingtoenroltheremainingterminalsbytheendof2015,basedonmarketanddemand.

Thehigh-qualityroadfreightnetworkofDHLisexpandedbyonestationeachinAustria,CzechRepublic,Denmark,GreatBritain, Italy,Netherlands,Poland,SpainandSwitzerland.Additionally,twostationsinGermanyhavebeenintegratedintothenetwork.Goingforward,DHLFreightplanstofurtherextend thecoverageofEurapid.Thecompanyannouncedthatninemorestationsaregoingtojointhenetworkbytheendoftheyear.

Source:DeutschePostDHL

dPd lAunChEs CROss-bORdER PARCEl shOP sERviCEsDPDhas launched integratedparcelshopservicesacrossEurope starting initially with cross-border B2C shippingbetweenGermany,AustriaandtheBeneluxandplanstoaddotherEuropeancountriesinthesecondstage.

The new service enables private recipients to get theirparcels deliveredor return themat anyDPDparcel shoplocated within the three countries mentioned above. This

cost-efficientoptionisbeingrequestedbymoreandmoreconsignees who are usually not at home during the day,DPDexplained.

Intermsofalternativestohomedelivery,directdeliverytoa parcel shop specified by the consignee is also possibleincross-bordershippingbetweenGermany,AustriaandtheBeneluxcountries.Assoonastheparcelhasbeendeliveredto the shop, the recipient is automatically informed viaSMSand/ore-mail.Inafewweeks,thisoptionwillalsobeavailableinFranceandSwitzerland.

Source:CEP-Research

gls dEnmARk sTARTs COnsTRuCTiOn Of nEw €6m dEPOTGLShasstartedtheconstructionofanewdepotinAalborg,anindustrialanduniversitycityinnorthernDenmark,whichisexpectedtosortupto5,000parcelsperhourdoublingthecapacityofthecurrentfacility.

The company said it is preparing for a further volumeincreasewithcapacityexpansioninDenmark.Itisinvestinga total of €6m in the Aalborg facility including premises,constructionandequipment.

GLSplanstobuilda2,600m²hallwithatotalof63gatesfor loadingandunloadingat thenewdepotwhichcanbefurtherexpanded,ifnecessary.ThefacilityisduetobecomeoperationalinJanuary2015.

Source:CEP-Research

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EUROPE fREnCh E-COmmERCE sAlEs COnTinuE dOublE-digiT gROwTh in q1 2014E-Commerce sales in France soared by 11% to €13.4bnduringthefirstquarterof2014,withthenumberofonlinetransactions rising by 15%, according to figures from thecountry’se-CommerceassociationFevad.

While the purchasing frequencyof French online shoppers furtherincreased by 10% to six purchasesduring the first threemonths of thisyear,theaveragespendperpurchasecontinuedtodropby4%to€81.50.However, the average amount thateach online shopper spent during

the first quarter overall increased by 5% to €491. Theincreasedpurchasing frequency thuscompensated for theloweraveragespendperpurchase,Fevadexplained.

France’s leading e-retailers saw3%growth year on yearduring the first quarter, according to the ‘iCE sitesFevadpanel40’,whichmeasuresthesalesofthe40topwebsites,accountingforabout30%oftheoverallmarket.Thisgrowthcanbeparticularlyattributedtoe-retailerssellingconsumerproducts(includingmarketplaces)whoshowed8%growthyearonyearduringthequarter.Atthesametime,e-retailsites selling to professionals (B2B) also saw their salesincrease9%overthesameperiod.

Source:CEP-Research

lE gROuPE lA POsTE lAunChEs sTART’inPOsT sERviCELeGroupeLaPostehaslaunchedStart’inPost,aninnovativeprogrammeaimedatsupportingtechnologystart-ups.Thenewserviceispartofitsnewcorporatestrategy,‘LaPoste2020:conqueringthefuture’.

Theprogrammewilllastforoneyearandwillberolledoutin two phases. The first phasewill be a three-month testphase, set up to commercial and technological viabilityandstrengthoftheproject.ThesecondphasewilllastninemonthsandwillseeLeGroupeLaPosteprovidingmaterial,methodologicalandcommercialsupporttocandidatestart-ups.Theaimistosupportupto24start-upsayear.

Start’inPostwillcompleteLeGroupeLaPoste’sinnovationanddevelopmentportfolio,whichalradyincludesLabPostalandXAngePrivateEquity.

Source:LeGroupeLaPoste

sTudy On E-COmmERCE And lOgisTiCs RElEAsEdThemonthofMaysawthereleaseoftheresultsofthe‘GlobalE-Tailing2025’study,initiatedbyDeutschePostDHLwithparticipationofthetrendresearchinstitutionsZ_punktandSeeMore aswell as numerous international experts fromretail, logistics and academia. One of the main findingswasthatoverthenexttenyears,onlineretailwillgainevenmore importance than expected so far. Logisticswill playa key role: it provides companies important competitive

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EUROPEadvantages, such as deliveries within a few hours on thedayofordering,flexiblereceivingandreturntimesaswellasresilientlogisticsandvalue-addedconceptsinemergingcountries.

Infourscenariosthestudyshowswhattheelectronicworldofshoppingaroundtheglobecouldlooklikeforconsumersand businesses in the near future. The different futureprojections are based on a detailed analysis of the mostinfluential factors – from energy and rawmaterial pricesto technological, political and social factors to retail andconsumptionpatterns.Thescenariosalsooutlinepossibleeffects of changes to society’s value system by 2025.All scenarios and contributions have in common that thecompetitioninelectronicretail,whetheronglobal,nationalorregionallevel,willbecomemoreintense.

Today e-Commerce makes up 8% of the overall tradingvolumeinEuropealready.Dependingonthescenario,thissharecouldriseupto40%indevelopedcountriesandupto30%intoday’semergingmarkets.

Source:DeutschePostDHL

dEuTsChE POsT dhl COnfiRms shORT And mid-RAngE TARgETsDuring the company’s AnnualGeneralMeeting, DeutschePost DHL CEO Frank Appel underscored the mid-rangegrowth targets contained in the “Strategy 2020” thecompanyannouncedinApril.DeutschePostDHLislookingback on a successful year 2013 and a good start to thecurrent financial year 2014. For the rest of the year, theGroupexpectstocontinueitspositiveperformancedespite

the persistently challenging economic conditions and toonceagaingenerateearningsgrowth.

During the first quarter of 2014, the group performedwellandcontinued togrow.Thegroup’s revenues totallednearly€13.6bninthequarter,anincreaseofmorethan1%comparedto the sameperiod theprevious year.Adjusted for negativeexchange-rateeffectsandotherinorganicfactors,therevenueincrease was more than 5%. The group also continued toimprove its operating earnings: during the first quarter of2014,consolidatedEBITrosebymorethan2%to€726m.ThisincreasereflectsthestrongpositionthattheGroupanditsdivisionsmaintainintheworld’sgrowthmarkets.

In light of the Group’s good performance during this pastfinancialyearanditsconfidenceaboutthecompany’sfuturegrowth, the Board of Management and the SupervisoryBoardporposedadividendof€0.80persharefortheyear2013,whichwasapprovedbyshareholderswithamajorityof99.84%ofthecompany’ssharecapitalpresentatthe.Thisreflectsanincreaseof€0.10overthepreviousyear’slevel.

Source:DeutschePostDHL;DeutschePostDHL

TRAns-O-flEx lAunChEs gERmAny-widE nETwORk fOR ACTivE TEmPERATuRE COnTROlGermany-based trans-o-flex Logistics Group is planninganationwidenetwork foractive temperaturecontrol tobelaunchedinOctober,thusstronglyexpandingitscapacityinGDP-complianttransportationofpharmaceuticals.

The basis of the new network consists of a centraltranshipment centrewhichwill be fully air-conditioned as

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EUROPEwellasacombinationofvarioustransporttechnologiesforthe last mile. Transports in the temperature range of 15-25°Cwill partially be conducted via special temperature-controlled vehicles as well as via conventional vehiclesequippedwithactivelytemperature-controlledboxes.

Tighter EU regulations for the transportation ofpharmaceuticals have pushed the reorganisation of trans-o-flex, supported and promoted by its parent companyAustrian Post. The aim is to help trans-o-flex stand outfromitscompetitorsmorestronglythanbeforeandensuresufficientcapacityfordirectdeliveriesofparcelsandpalletsinitscoreindustriespharmaandhealthcare,inviewofthegrowingdemandfortemperature-controlledtransportation.

Source:CEP-Research

POsTE iTAliAnE sET TO flOAT As TnT POsT iTAliA RE-bRAndsPoste Italianewillbecome thenextmajor listedEuropeanpostal operator later this year following the new Italiangovernment’sofficialapprovalofplanstosella40%stakeinthecompanytoraiseupto€4.8bntoreducepublicdebts.

The cabinet of Prime Minister Matteo Renzi on Fridayformally approved partial privatisation of the state-ownedpostaloperatorthroughasharesalethatmight takeplaceinseveralsteps.Thegovernmentsaiditmightofferpostalemployeesincentivestobuyshares.Notimingwassetforthesell-offbutitisgenerallyexpectedinthesecondhalfoftheyearfromSeptemberonwards.

Meanwhile,thecompany’smainchallengerinthedomestic

mailbusiness,TNTPostItalia,asubsidiaryofDutchgroupPostNL, has re-named itself Nexive. The company, withrevenues of €223m in 2013, said the change of name“expressesthevisionofbecomingaplatformforexcellencein delivery of mail and e-Commerce”. Nexive, with morethan5,500employeesandmorethan600branchesandretail outlets, has some30,000business customers andclaimstoreach74%ofItalianhouseholds.

Source:CEP-Research

POsT luxEmbOuRg gROuP REPORTs On sTAblE TuRnOvER in 2013In2013,thePOSTLuxembourgGroupmaintainedastableturnoverat€677.4minaverycompetitiveenvironmentandachievedsolidfinancialresults.POSTLuxembourgGroup’soperating result reached €56.46m – down by 9.4% –whilstthenetresultaftertaxeswas€60.1m,adecreaseof2.07%comparedto2012.

Withregardtotheoperatingcosts,thePOSTLuxembourgGroupregisteredan increase in itswagebill,aswellasaconsiderableincreaseindepreciationfollowinglarge-scaleinvestment projects in terms of high-speed landline andmobile infrastructures, as well as the infrastructures ofotherinformationandcommunicationtechnologies,andtheextensionandmodernisationofitsrealestate.

Inanowcompletelyopenmarket,POSTCourrierhashadamitigatedyearintermsofsalesresultswithaslightdownturninthetotalturnoverfrompostalproductsandservices.Thisreduction is predominantly due to the structural decreaseinvolumeof thepostal items,whichshouldpickup in the

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EUROPEyears tocome.Theparcelsmarket,however,continuestogrow steadily, a 17.7% volume increase in 2013. POSTFinance has witnessed a decrease in revenue between2012and2013,mainlyduetotheveryweakinterestratesin the financialmarkets.ThePOSTTechnologies turnoverhasremainedrelativelystable.AsforPOSTTelecomS.A.’scommercialactivity,theearningsrecordedin2013fortheentiretelecomentityaresimilartothosefrom2012withastableturnover.

Source:POSTLuxembourg

POsTnl dEvElOPs hOmE dElivERy sERviCE fOR fREsh fOOd bOughT OnlinEPostNL is developing a home delivery service thatsupermarketsandfreshfoodcompaniescanusetotransportproducts ordered online to the customers using quick,refrigeratedandcost-efficientmethods.The initial pilot intheVenloareawasasuccess.Starting22May,PostNLisnowpartneringwithonlinefreshsupermarketVershuys.comthroughout theDutch province of Limburg to offer a newhome delivery service for foodstuffs. In this second pilot,eveningdeliverywillalsobeavailableuponrequest.

In the first stage of the pilot (March 2014), PostNLexperimented with home delivery of groceries that wereorderedonline.Intheend,aspecialcoldstoragepackagingwas selected, developed in cooperationwithWageningenUniversityandResearchCentre.Thismethodallowsfreshfoodproductstobedeliveredattherighttemperaturewhentheyreachthecustomer’sdoor.Thecollaborativeprocessincluded universities, but also packaging companies,

consultancyorganisationsandcustomers.

Various surveys by Statistics Netherlands (CBS), INGEconomic Bureau and Thuiswinkel.org have shown hugegrowth potential in the online retail of fresh foodstuffs.Youngfamilies,companiesandinstitutionshaveexpressedaparticularpreferenceforonlineshoppingtocutdownonheavy lifting and save time. Respondents do have doubtsaboutthefreshnessandshelflifeoftheproducts.Theyalsostatethattheywanttodecidewhenproductsaredelivered,manyexpressingapreferenceforeveningdelivery.

Source:PostNL

TnT ExPREss COmPlETEs sAlE Of TnT fAshiOnTNTExpresshascompletedthesaleofitsspecialistfashionsupply chain business in the Netherlands, TNT FashionGroupB.V.,toaconsortiumofBelspeedandNetlogGroup.This follows receipt of regulatory approval and positiveadvicefromtheworkscouncilofTNTFashion.

TNTExpressannouncedon11March2014itsintentiontosellTNTFashionaspartofitsstrategytofocusoncoreexpressdeliveryservices.Thetransaction,thetermsofwhichremainconfidential,willcontributealimitedbookgain.

HeadquarteredinOldenzaal,theNetherlands,TNTFashionoffers specialist supply chain services for the fashionandlifestyleindustry.TNTFashionemploysabout660peopleandhasannualrevenuesofapproximately€120m.TheUKoperationsofTNTFashionarebeing integratedwithTNTExpressUKandIreland.

Source:TNTExpress

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EUROPE swiss POsT AnnOunCEs quARTERly REsulTsInthefirstquarterof2014,SwissPostachievedaGroupprofit of CHF199m, compared to CHF222m during thesame period the previous year. The decline of CHF23misprimarilydue to reduced interest incomeresulting frompersistentlylowinterestratesonthefinancialmarketsandhigher impairmentcharges.Operatingprofit (EBIT)stoodat CHF253m, down from CHF272m the previous year.In the first three months of 2014, Swiss Post generatedoperating incomeofCHF2.1bn.This represents a dropofalmost1%yearonyear,whichcouldnotbefullyoffsetbyreductions in expenses. Operating profit (EBIT) totalledCHF253m,whichwasCHF19mbelowthepreviousyear’slevel,andGroupprofitstoodatCHF199m.Allfourmarketscontributedtothepositiveoverallresult.Prior-yearfigureshavebeennormalisedtotakeone-offitemsintoaccount.

In the communication market, Swiss Post recorded anoperating profit of CHF88m. The decline in income atPostMailandPostOffices&SalescausedbylowervolumeswasoffsetbycostsavingsintheseareasandbygrowthinincomefromSwissPostSolutions.Inthelogisticsmarket,Swiss Post recorded an operating profit of CHF31m.Thisdecrease isdue tohighcompetitivepressure.Parcelvolumes were up 1.1% in Switzerland. In the passengertransportmarket,PostBus recordedanoperatingprofitofCHF13m.PostFinance,whichoperatesintheretailfinancialmarket,recordedanoperatingprofit(EBIT)ofCHF127minthesegmentresults.

Source:SwissPost

full RAngE Of sERviCEs fOR OnlinE RETAilERs wiTh yEllOwCubESwiss Post is rounding off the services it offers businesscustomers in the booming e-Commerce market. Onlineretailers can now outsource all of their distance-sellingactivities to Swiss Post, following the launch of theYellowCube logistics solution, which allows Swiss Postto handle everything from order processing, marketing,payment,end-to-endlogisticsandcustomerservice.SwissPost delivers parcels in the evenings and on Saturdaysor toparcel terminals for collection around the clock andcustomers can specify online where Swiss Post shouldsendtheirmissedparcels.Returnsarecollectedbythemailcarrierdirectlyfromthecustomer’sdoorstep.

Thee-Commercemarketisgrowingyearlyby5to10%inSwitzerland.Shippingvolumesaregrowing,onlineshoppersexpect rapid delivery times and the number of returns isrising. Such trends create major logistical challenges foronline retailers,which iswhy thedemand for outsourcingsolutionsonthemarkethasgrown.

After a two-year development phase, YellowCube, SwissPost’sall-ine-Commercelogisticssolution,beganoperatingin April 2014. The solution handles product storage andpicking,parcelpackingandtheentirereturnsmanagementsystem. Together with the logistics services that areupstreamanddownstreamofYellowCubeprocesses,(goodscollection at the suppliers, aswell as shipping and returnshipping),SwissPostistheonlyproviderinSwitzerlandtoofferaone-stope-Commercelogisticssolution.

Source:SwissPost

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EUROPE ROyAl mAil PublishEs full-yEAR REsulTs RoyalMailplcannounced its full-year results for theyearended30March2014.Grouprevenueincreasedby2%,due to parcel revenue growth in both UKPIL and GLS.Parcels are the largest contributor to Group revenue,accountingfor51%.

Groupoperatingprofitbeforetransformationcostsgrewto£671m. Group operating profit after transformation costsincreasedto£430m.Theoperatingprofitmarginreducedfrom4.4% to 4.2%, as a result of the provision for themanagement reorganisation programme. Profit beforetaxation (excluding specific items) of £363m reflects thetrading performance of the Group. Accounting standardsrequire us to include a one-time, non-cash benefit of£1,350m as a result of the Pensions Reform in reportedprofit before taxation and reported notional earnings pershare.EBITDAbeforetransformationcostsgrewto£942m,duetoimprovedtradingperformance.

UKPILrevenuewas£7,787m,up2%.UKPILparcelrevenueincreased by 7%. As expected, parcel volumes (1,068mitems) were flat compared with 2012-13. UKPIL letterrevenue(includingmarketingmail)declinedto£4,625m,a2%reduction.The4%declineinaddressedlettervolumesforthefullyearwasatthebetterendofourforecastrangeoffourto6%perannum.Marketingmailrevenue,partofletterrevenue,was£1,111m.UKPILgeneratedoperatingprofitaftertransformationcostsof£309m.Theoperatingprofitmargindecreased from 3.9% to 3.5%, again as a result of theprovision for the management reorganisation programme.

GLSrevenuewas£1,651m,up7%.Volumesincreased6%,with growth in both domestic and international volumes.GLSoperatingprofitwas£108million.

ROyAl mAil gROuP AnnOunCEs nEw sundAy sERviCEsRoyalMail is topilotSundayafternoonopeningataround100ofitsdeliveryofficeslaterthissummer.Theinitiativeisdesignedtomakeiteasierforshoppersnotathomeduringthe day to get their parcels. Delivery officeswith highestparcels volumes across England, Scotland Wales andNorthernIrelandwillbetakingpartintheinitiative.

InanothermovetoassessSundayservices,RoyalMailwilltrialSundayparceldeliverieslaterthissummertoaddresseswithin the M25 motorway. Royal Mail Group’s expressparcels business, ParcelforceWorldwide, has announceditwill launchaSundaydelivery service inJune foronlineshoppers through participating e-retailers. ParcelforceWorldwide will make the service available to contractcustomersacrosstheUK.

RoyalMailhasalsoannouncedtheopeningofitsdistributionnetworklateronaSaturdayandonSundays.ThisnewservicebecameoperationalinMayandenableslargere-retailerstohand itemsorderedby shoppersonaSaturdayafternoonandSundaytoRoyalMailfordeliveryonaMonday.

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EUROPE hERmEs OPEns uk hub TO sPEEd uP gROwThHermesUKhasofficiallyopeneditsnew£14mcentralhubinWarrington,closetoManchester,toincreasecapacity,speedupdeliveriesandenablethefirmtocontinueitsrapidgrowth.

Hermes said the new facility is its largest-ever singleinvestmentintheUKandsignifiesits“commitmenttogrowthand service”.A second expansion stage is plannedwhichwouldtaketheinvestmenttoatotalof£25m(€30m).The15,000m² facility, able to sort up to550,000parcels aday,isnowalmostthreetimeslargerincapacitytermsthantheprevioussiteinWarrington.

HermesUKsaidthenewhubwillhelpwiththedevelopingrequirementfornextdaydeliveriesandwillplayakeyrolein plans for international expansion. It will also provide aplatform for further innovation, as the company looks tointroduceahostofnewandexcitingproductstothemarket.Perhapsmost importantly itwill helpHermes ensure thatitscustomerscancontinuetohavefullconfidenceinfutureyears’peakperiodsintermsofcapacityandservice.

Source:CEP-Research

uk mAil invEsTs in gROwTh As PROfiTs RisEBritish parcels and letters delivery company UK Mail isinvesting in new services and expanded capacity afterimproving profits by 28% thanks to double-digit parcelsgrowth.Thegroupincreasedrevenuesby7%to£508.5mintheyearendingMarch2014andimprovedpre-taxprofitsby28%to£22.8m.Theunderlyingincreases,adjustedforfourextraworkingdays,were5.3%and17%respectively.

UKMail’s parcel revenuesgrew rapidlyby 16% tonearly£220mwhile operating profit improved strongly by37%to£22.4m.Thecompanysaidthattheparcelbusinesshad“high volumes throughout the year”, which resulted in ahighermarketshareandadouble-digitoperatingmarginof10.2%,comparedto8.6%thepreviousyear.Thevolumegrowthwas“partly”drivenbyanincreaseinhomedeliveriesrelated to online shopping,with a continuation of themixchangetowardsB2C,itadded.

Mailrevenuesgrewbyjust1.5%to£245mwithvolumesupby2%andoperatingprofitroseby18%to£12.7m,pushingthemarginto5.2%from4.4%lastyear.Thenewpacketsservice,offering low-costdeliveryofsmall itemsintwotothreedays, “enablesus toprovideaprofitableproduct tocustomerswhich can competewith the ‘lifestyle couriers’who provide a basic service at low cost” in the £1.2bnpackets market, the company commented. The courierbusinesssawrevenuesdrop1.9%to£16mbutcostcontrolshelpedincreaseprofitsby7%to£2.7m.Similarly,palletsrevenues dropped 3.2% to £27m but profits increasednearly19%to£0.9m.

Source:CEP-Research

zAlAndO usEs hERmEs uk PARCEl shOPs fOR dElivERiEs And RETuRnsGermanfootwearandfashione-retailerZalandohasteamedupwithHermesUKtousethedeliveryfirm’snetworkofover3,500pick-uppointsacrosstheUKtoenablecustomerstoreceiveandreturntheirpackagesatatimeandplacemostconvenientforthem.

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EUROPEThe Hermes pick-up points are located at newsagents, petrol stations andsupermarkets.ManyoftheshopsareopenonSaturdayand/orSunday,aswellasafterregularbusinesshours.

HermesUKplanstoextenditsparcelshopnetworkoverthenextfewmonths,withtheaimtoreacharound5,000pick-uppointsbythebeginningof2015.

Source:CEP-Research

CiTysPRinT’s REvEnuEs And PROfiTs RisE sTROnglyBritishsame-dayproviderCitySprinthasannouncedrecordrevenuesof£112.7mfor the financial year 2013, which represents an 11.4% increase, and a strong15.4%increaseinitsoperatingprofitto£12.3m,asaresultoforganicgrowthandacquisitionsaswellastechnologicalinvestment.

CitySprint Logistics profited from increased investment with growing volumes.CitySprint Retail saw an increase inDirect-to-Consumer deliveries even thoughtherearestillsomechallengesintheareassuchastechnologycompatibilityandprice,CitySprintexplained.CitySprintHealthcarehasbenefittedfromcooperatingwith‘someverystrong’partnersandcustomersinthisspecialistareaoflogisticsservices. An important growth factor has become the homemedication deliverymarket,whereCitySprintdeliversmedicinesfrompharmaciesonthehighstreet,andwithinhospitals,topatientsathome.

Intermsofacquisitions,CitySprintcompletedsixdealsin2013includingsuccessfulintegrationofthecompaniesintoitsbusinesslinewiththeaimtoleverageitsexistingbusinessinfrastructureanddevelopnewverticalsectoropportunities.

Source:CEP-Research

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ABOUT THIS PUBLICATION ABOUT IPCInternationalPostCorporation is a cooperative associationof24memberpostaloperators inAsiaPacific,EuropeandNorthAmerica.Overthepast twodecadesIPChasprovidedindustryleadershipbydrivingservicequalityandinteroperability,supportingitsmemberstoensurethehighperformanceofinternationalmailservicesanddevelopingtheITinfrastructurerequiredtoachievethis.IPCengagesinindustryresearch, creates business-critical intelligence, provides a range of platformsformember postCEOs and seniormanagement to exchange best practices anddiscussstrategy,andgivesitsmembersanauthoritative,independentandcollectivevoice.IPCalsomanagesthesystemforincentive-basedpaymentsbetweenpostaloperators.Withmembersdeliveringsome80%ofglobalpostalmail,IPCrepresentsthemajorityoftheworld’smailvolume.

Formoreinformationpleasevisitourwebsitewww.ipc.beorcontactusatinfo@ipc.be.

AvenueduBourget,441130Brussels-BelgiumTel.:+32(0)27247271www.ipc.be

IPCMARKETFLASH isa fortnightlynewsletterprovidingacomprehensive lookatnewdevelopmentsemergingintheinternationalpostalmarketplace.ItispublishedbytheMarketingdepartmentofInternationalPostCorporation.

If you would like to contribute to this publication or require further information,pleasecontact:publications@ipc.be.

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