In Argentina’s fully competitive mail market, OCA is the leading competitor to the national post, the Correo. John Modd got an insight from president and CEO Alfredo Romero.
OCA started operations in 1957, and is the major private postal and parcel operator in Argentina. Romero told me the company’s “nationwide structure, advanced technology and, above all, more than a 53 year expertise, allow the company to claim leadership in the market”.
I can speak from personal experience that, in Buenos Aires at least, it is almost impossible to go anywhere without seeing the distinctive OCA livery on people, vehicles and buildings.
Alfredo himself has 17 years’ experience in the company, primarily on the commercial side. He became CEO in 2006, and actually bought OCA in November 2009.
He explained the company has over 7,000 employees as well as 2,800 agents, or franchisees. They operate through some 150 branches. 900 vehicles are involved in the delivery of some 300m mail and parcels items annually. OCA covers the whole of Argentina, making it “the most important private distribution network in Latin America”, according to Alfredo. 2008 saw a 36% growth in revenue year on year.
As for OCA’s mission, Romero summarised it as “to consolidate market leadership by providing high value added services to clients through the development of innovative solutions using state of the art information technology”.
Products and customers
During our discussion it became clear that OCA has a wide range of products and services focussed on corporate sectors but also available to individuals. One of the segments served involves customised solutions for banks: credit and debit card deliveries, statements, documentation, and transportation of bank clearing. Other key sectors include telecommunications, government, retailers, electronics and pharmaceuticals. Some customers have been working with OCA for over 40 years.
As one might expect, direct sales and e-commerce are also important – and growing – market segments. “They represent lots of parcels for us. For example, OCA is the most important logistics operator for modems and cell phones.”
Legal communications, general corporate mail, printing, finishing and distribution also feature in the product portfolio.
“Recently we have launched the New Generation of OCA products which add more value for our customers through state of the art technology” Alfredo said. “Our tracking system lets the customer know each stage of the process until final delivery.”
I asked if there were any particular problems about delivering in Argentina, such as getting to isolated rural communities, or problems with the quality of addressing.
Romero explained: “We find no major difficulties in getting to rural areas except as a result of climatic factors, although timing and frequency are not the same compared to cities and other areas of higher population density. Basically the disadvantages are the lack of updated information such as recipient’s address or wrong zip code. However, we work together with our clients in order to decrease the volume of undeliverable mail.”
He went on to remind me of the work OCA has done in the areas of crime prevention and accident reduction, and the organisation’s pride in winning a World Mail Award for the programme.
The competitive Argentinean market
Given the Argentine market is fully liberalised, I wanted to know whether there were requirements placed on OCA by the regulator in areas such as service standards.
Alfredo told me that the regulator is the Comision Nacional de Communicaciones, or CNC. Operators are required to register with the National Register of Postal Operators in Argentina, which is linked to the CNC.
Each postal operator is required to pay an annual licence fee of 5,000 pesos (US$5,000). The CNC is required to audit the quality standards of the registered operators.
Discussing regulation led us to talk more widely about the state of the mail and parcels market in Argentina. Alfredo confirmed that the advance of information technologies and the spread of electronic media had impacted mail volumes, particularly in regard to individuals.
But the internet had its positive side, as in other developed economies “not only for express packages, but reverse logistics, storage, inventory control, preparation and packaging of items requested by e commerce sites as well”. Modem and cell phone penetration in Argentina had seen significant growth. OCA has responded by developing products such as hybrid mail, printing, and other interactive platforms. “As a consequence we have seen that the internet has been increasing our volume,” Alfredo concluded.
Romero then spoke about the competition, both Correo, the national postal operator, and private sector competitors.
According to CNC data from 2008, Correo has a market share of some 41% leaving the majority of the market to the private sector. However, 126 private operators are fighting for the other 59%. Of these OCA is clearly the leading player, with a third of the private sector share and 19% of the total market.
Building on its strong position in Argentina, Romero has plans to start operating outside of Argentina in 2010. He explained that OCA is a member of an international association of private mail operators in the Americas, ALACOPP, of which he is President. This stands for ‘Asociacion Latinoamericana de Correos y Operadores Postales Privados’. Operators in Chile, Colombia, Ecuador, El Salvador, Mexico, Panama, Peru and Uruguay, as well as Argentina, are members of ALACOPP. Opportunities exist for the cross-border exchange of mails and parcels between the members: “It brings the opportunity to achieve new challenges oriented to developing business between the market players,” Alfredo said.
I asked Alfredo what he enjoyed most about his job. What caused him the most concern? How optimistic was he about the future?
He told me “it is very challenging for me to manage a team of more than 7,000 employees and to make customers feel satisfied with the services and products OCA offers them. My main concern is to continue the transformation of our products and services that is needed in order to keep growing in the future. Due to the fact that the economic crisis looks to be behind us, I feel very optimistic about the future.”
Given that full mail liberalisation in Europe is getting ever closer, I asked Alfredo for some final words of advice for other private operators who wish to compete with national posts:
“Full liberalisation is a fact in Latin America. From my point of view, and based on our experience, it’s a direction from which there is no way of return. Liberalisation offers a big opportunity for growth and expansion. The best example of this is Argentina itself.”
This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.
Source: Mail & Express Review