Brazil's Correios to invest billions in network modernisation

Brazil’s Correios plans to invest R$4bn ($2.5bn USD) over the next five years to improve postal services and modernise infrastructure. The plan, which has been submitted to the government, was announced last week as Wagner Pinheiro revealed financial results for his first six months as president of Correios.

The state-owned Post made a net profit of R$499.65m ($318.65m USD) in the first half of the year, a 48.2% increase on the same period in 2010.

Revenues increased 11.72% year-on-year, while operating costs also increased 9.44%.

Pinheiro said revenues had increased because of expanded operations and better efficiency, along with targeted efforts to improve services in certain regions.

The package segment was a particular area of growth, with an 18% increase in express and 21% increase in standard parcel shipments.

Investment

From next year, the $4bn investment programme will aim to modernise and expand the Post’s branch network, vehicle fleet and information technology, as well as upgrading and building new distribution centres and cargo terminals.

The new Correios president has already overseen the start of modernisation of operations, along with a major effort to hire 10,000 new workers to cope with a shortage of staff. Some 3,700 new apprentices have already been hired through the recruitment program.

The Post has also effected a new corporate structure, signed a new postal banking partner in the form of Banco do Brasil, and has been making progress towards strengthening its air cargo network.

“We have taken several actions to improve service to the population and the entry of almost 10 000 new workers will further improve services,” said the president of ECT.

Correios was given extra powers to modernise and expand into new areas, including new financial services, postal services and expansion abroad, through a law passed by Congress in May. Among the new powers, the law allows Correios to make acquisitions of other companies.

Transport

Transport network improvements are a big part of the improvement plans at Correios, which has already started setting up new ground transport routes and is building its air cargo network.

Bids have already been made for three new night-time routes in the south of the country, while there is also an intension to bid for three new air routes in the north and northeast of Brazil over the next six months.

Last week, the Correios board also confirmed that it is interested in becoming a customer of the proposed high-speed “Bullet Train” link between Rio and Sao Paulo, although the bidding to operate the link has run into fresh delays.

The news conference also saw discussion of the new social development remit of Correios under Brazil’s socialist President, Dilma Rousseff, which aims to see expanded access to postal services as well as the Post working to improve the situation of vulnerable people.

Earlier this month, Correios opened its first post office branch in the Complexo do Alemão area of Rio de Janeiro, an impoverished area of favelas notorious for its drug gangs before a military occupation by the Brazilian military forces late last year.

During last week’s news conference, Pinheiro also launched a new corporate blog, which he said would become an important channel of communication between Correios and the Brazilian public.