The week that was: 20 May 2011

Thijs says “change is here to stay”, Canadian strike possible within days, and World Mail Award winners revealed… Welcome to ‘the week that was’. It has been a busy week for many industry leaders with an interesting World Mail & Express Europe conference taking place in Brussels. Catch up with the news here before a well-earned weekend.

This week, delegates at the World Mail & Express Europe conference heard that “change is here to stay” as the continuing drop in mail volumes forces postal operators to alter their strategies. The event took place at the Conrad Hotel, in Brussels. A diverse range of differing postal strategies were discussed as postal companies explore different avenues in a bid to build for the future. Johnny Thijs, chief executive of bpost, elaborated on his company’s success – through a long-term strategy with “clear agreements” and “transparent communication”. To back-up this success, Thijs said that the operator’s EBIT has grown to EUR 319m in 2010, compared to minus EUR 79m in 2003. “bpost needs to be part of the modern environment; competing for new business…Status quo is not an option,” Thijs said, before placing importance in “multi-annual planning”. He added that in Belgium the decline in volumes was not as sharp as other European countries, but that would not last. “We need to build a new company through innovation. We have large direct mail projects that work,” he said, before stating that operators should explore what can be done to support their core businesses. Away from traditional mail, Thijs discussed bpost’s recent ventures including the electronic ID card and medical subscriptions. He confirmed that bpost had agreed a deal to provide number plates in Belgium, on a ten-year contract worth EUR 30m per annum. Thijs stated that strong performance is needed to attract investors, including: low growth yield stocks, high sustainable dividends, compensation for the decline in mail; well run operations; strong cash flow; and a cost cutting track record. Furthermore, he suggested that an investment from venture capitalists allows a business to concentrate on profitability over politics. He concluded by stating that “we have done well… but the day is not over” before adding that “change [within the postal industry] is here to stay.” Stefano Gori, head of international business strategy, Poste Italiane, said that “innovation and integration are most important. They move hand in hand.” He added that Poste Italiane had invested in order to “innovate and streamline our postal business.” Gori said it was imperative to learn how your own customers perceive your business. In light of the operator’s trusted reputation, Poste Italiane was able to launch an insurance arm seven years ago. Other non-mail services include PosteMobile. Since 2007, more than 2.3m new customers have chosen the service, and so far EUR 240m has been transferred through 7m mobile financial transactions, Gori claimed. As a result of pursuing new initiatives, only 39% of Poste Italiane’s revenue came from post during 2010; compared to 54% in 2003. When quizzed over the operator’s potential privatisation, Gori said that it is “not in our hands – we have been ready for the past five years”. He added that privatisation plans were floated when the business was struggling, but now Poste Italiane is delivering a strong net profit of around EUR 1bn annually – suggesting that the government is satisfied with the income from its national operator.

A postal strike could occur within days in Canada, with the Canadian Union of Postal Workers yet to agree a new collective bargaining deal with Canada Post Corporation. The union issued statements on Wednesday seeking to get the Canadian public on its side by assuring them that in the event of a strike, pensioners and people on low incomes would still receive their cheques. When the clock strikes midnight on May 24th, union members will be able to exercise their right to strike and Canada Post its right to lock out its workers if a deal is not hammered out in time. Both parties must provide 72 hours notice of their intentions prior to a strike or lockout. Canada Post did not respond to a request for comment on the progress of talks with the union, but the CUPW said on Wednesday it is “doing its best” to reach a settlement, though the two sides remain apart on “many issues”. The Crown Corporation presented a new offer to the union on Tuesday night containing “several major rollbacks”, but the union said the offer “meets very few of our demands”. From the union’s perspective, Canada Post has been profitable for 16 years yet is demanding wage cuts for new workers and a new “inferior” sick leave plan for all staff. The union also has demands on working conditions in the light of upgrades to Canada Post infrastructure and procedures. The latest four-year contract offer from Canada Post maintains the proposed Short Term Disability Plan that seeks to cut down on sick leave days from the current sick leave arrangements. Wage increases have been offered for the four years of the deal of 1.75% for the first two years followed by a 1.9% increase and a 2% rise in the final year.

The winners of the 12th World Mail Awards were crowned during an exciting and memorable evening in Brussels on Tuesday. Leading players from across the industry gathered at the Conrad Hotel to pay homage to those who have excelled across the course of the past year. Honoured for his outstanding contribution to the mail industry, Massimo Sarmi, CEO and managing director of Poste Italiane, collected the Industry Leadership Award. Sarmi said: “For me it is a great honour to receive this prestigious award, also because the judging panel includes important former and current leaders of the industry. This recognition is not only for my work over the last nine years, but also for my team, including more than 150,000 colleagues who interact with our customers every day. The other big winner on the night was private Polish operator InPost. The company scooped two awards on the night – for E-commerce and Innovation. Speaking to Post&Parcel, the InPost team – Rafal Brzoska, CEO, and Marcin Bosacki, head of international – said: “We are truly delighted to have won two awards this evening. This is the result of team effort. Hearing InPost’s name read out twice makes all the hard work worthwhile. Innovation is our top priority, so we are very happy.” Furthermore, it proved to be a great night for Guernsey Post after the operator landed the People Management Award. The company was amongst one of the smallest represented throughout the evening. Click here to view all of the winners!

And finally…

June’s issue of Mail & Express Review is now hot off the press. To subscribe to the magazine click here.