The company wants to take advantage of its network to expand more services and diversify its activities to cope with the decline in mail delivery
The incarceration was a turning point for companies that, like Correos, have become aware of the changes this situation has undergone among citizens, who are increasingly digitized. “They still ask me if there are mailboxes in the streets,” explains the president of the state-owned company, José Manuel Serrano, who insists the company “has a future” if it manages to transform its business model into new distribution areas. on the one hand, taking advantage of the potential of its network of 2,383 offices, to tackle the problems of less urban Spain.
-How do you deal with this new phase after the pandemic and the effects it has on the company?
-There was a very important turning point, in March 2020. Digitization has inevitably accelerated, to the point that we will lose 560 million letters by the year 2020, and it has been like that ever since. For this reason, we need to diversify the business, like any other business, to give more power to what we know to do, as we know how to do it, last mile distribution, e-commerce or parcel delivery. Until that last mile, you have to occupy the entire value chain.
-But criticism of the unions is growing in the face of doubts about their viability. Is there a future?
-Yes, of course there is. And many. What happens is that there is no alarm. Every time the ‘online’ business is consolidating more. We face this reality by diversifying our business in all niches that have packages and offering solutions to the customer.
-Why is the strategic plan paralyzed?
-We’ve been working on it since 2019. But since 2020, so much has happened to the productive fabric and so much globally, like a pandemic or a war, that we’re adapting it. In any case, the main lines are intact: diversify in the field of parcels, take care of storage logistics, air freight, consolidation at origin and also customs in Spain.
-How is Correos Cargo evolving within this diversification?
-It was a company that we opened in 2019, as a result of diversification, along with the one in Portugal. The company is already in positive numbers. Air freight will continue to grow for the rest of the year. We have two weekly scheduled flights between now and the end of the year and even by the end of the year we hope to have a second operational aircraft.
-But the traditional post office is still losing.
-The current situation will tend to improve very markedly. We need a little more time than we expected precisely because the conditions in Ukraine also affect us completely, like all companies. What we thought would happen in 2024 is a little further into 2025. Already diversified companies will be able to counteract card loss, which is unfortunately a reality that we continue to see decline. In the medium term, the company has a future and a lot. He has at least three more centuries, like the three he is already on his way.
-Correos Market is another pillar of diversification. Even if it means facing global giants like Amazon…
-I also want to bet on the public from another point of view, look at our country’s prolific witness. That’s why we launched our ‘marketplace’, with one difference: we don’t charge a commission for being or selling with Correos. That percentage remains with Spanish companies, which have the main distribution network to sell their products competitively in the peninsula.
-They are a publicly traded company, but they have to compete with private companies.
-They don’t give us the postal service, we get it with the tenders in which we sometimes win, and sometimes we don’t. I want to break a spear in favor of Correos because we don’t live on state resources. The universal postal service is exactly 5% of our turnover, about 110 million. The other 95% comes from competition.
-What role will the branch network play in the future?
-We have a capacity of 2,383, surpassed only by some banks. We’re not closing any. But we are going to give it added value, with more services. And there is a space in the field of public administration, where we can become a reference agency for citizens, handle the maximum administrative procedures, make life easier and avoid travel. It’s about enabling a whole catalog of services from the administrations we talk to, such as city councils, county councils, communities or the state.
-Is that a single window?
-We already offer the possibility to buy and sell a vehicle between individuals in the office, pay the transfer tax, be in contact with the DGT, the treasury, the community…
-After complaints from the elderly about the treatment of the banks, Correos was placed in the epicenter as a financial services provider in rural areas.
-We’re going to deploy 1,500 ATMs. We already have agreements with entities and we provide basic transactions that they need in every municipality, including cash with the postman. And we have great similarities, like Santander, that works and I hope it’s going to be a line of diversification and revenue going forward.
Do you plan to extend this type of service to other entities?
-Correos Cash is open to all banks that want it and there are open negotiations with other entities. Ultimately, it is a commercial network and as such it must find a way to be socially, economically and even environmentally sustainable. We are looking for new business niches there. Ultimately, if you bring the services closer to citizens, we understand that it will be easier for people to live in the rural environment in a better way.
Nor is Correos exempt from the economic consequences of the Russian invasion of Ukraine, the increase in the price of electricity, fuel or gas used for part of its fleet.
-What is the impact of this current situation on the company’s accounts?
-It is important. We are major consumers of electricity. In a fleet of 15,000 vehicles, we have electric vehicles, hydrocarbon vehicles and we also have gas vehicles. The growth in the increase in the gas price is striking, with which we indeed estimate an impact of approximately 40 million euros on raw material costs.
-How do you adjust this reality in the budget?
-We are determined not to pass these costs on to the citizen in what is a public service. And in the rest of the pricing, we try to talk and reason with our customers, who are publishers of large parcels or mail, to try to reach a consensus to reduce the price increase.
-CSR plays a key role in the field of mobility.
-In our commitment to sustainability, we have decided to inform citizens that an electric vehicle can be delivered within 72 hours, although not an urgent one within 24 hours. They are responsible shipments so that the customer can participate in the decision-making process with regard to the options we offer.
Source: La Verdad