Hybrid Mail: Effectively Transforming Postal Operations
Hybrid Mail: Effectively Transforming Postal Operations
Read MoreTag: Italy
Poste Italiane long term IDR affirmed 'A+'; outlook stable – Fitch
Fitch Ratings said it affirmed Italian postal group Poste Italiane SpA’s long-term issuer default and senior unsecured ratings at ‘A+’ and short-term issuer default at ‘F1’ with a stable outlook.
The ratings reflect Poste Italiane’s strong links with the Italian State, rated ‘AA-‘ with stable outlook.
Fitch said in its view, the strong links stem from the State’s 89.5 pct ownership of Poste Italiane, the large range of state-related tasks performed by Poste Italiane, its role in public sector funding, the contractual relationship between the two as defined in the unsigned Contratto di Programma and the fact that Poste Italiane is the largest employer in Italy.
The postal services activities remain loss-making and are subsidised by the profitable financial services activities. However, the attributable operating loss narrowed in FY 2006 to 4 mln eur from a 227 mln eur loss in FY 2005 on improved efficiency and automation, and an increase — albeit delayed — in domestic mail tariffs in April 2006, Fitch said.
The Role Of European Post Offices
Noted this week is Richard Owen’s observations on “The Italian Perspective” in the Times.
Owen like myself, feels some frustration in the lack of thought when it came to revolutionising the UK’s postal network and, compared to the Italian model, postively backward.
The trouble is, attempts to make the most of the internet age and diversify in terms of products, has all been too little and too late for the Post Office. Declining mail volumes and the switch to online payments for road tax and direct state benefits have hit post offices very hard in a relatively short space of time. I cannot argue with the reasoning behind closures – they cost a fortune to maintain and many run at a loss, but we’re closing them because the network has simply bumbled along with insufficent thought to their long-term future. We also seem to be putting all our trust in a digital age when many areas of the UK (particularly rural) have little or no internet connectivity.
This all reminds me of a friend who lives not far away, in a more remote area of France. He often experiences complete power cuts – sometimes for several hours. Television reception is poor, the location impossible for a good line of sight for satellite reception, and entirely at the mercy of a local farmer who kindly erected a kind of makeshift booster mast made out of unwanted farming implements. It stands, somewhat embarassed, amongst a flock of bemused sheep. It works – when the weather is reasonable.
For many, a post office email service would be a lifeline, and use of the internet a real bonus. Cash machines too are few and far between and a post office network that was hooked into all the major banks would transform the role of post offices. Instead, the British see them as places to buy stamps and not much else.
Post offices have traditionally been community hubs and actually, whilst the technology may have changed, there is no reason why they cannot continue to be – and thrive.
Read MoreThe Italian perspective
As Royal Mail closes post offices, its counterpart in Italy is expanding and moving into profit by adopting a strategy that Royal Mail bosses might wish to consider.
The Italian postal turnaround offers an example of go-ahead enterprise in a country that, on the whole, is mired in gloomy predictions of decline, low growth, stagnation and instability. How has this unlikely miracle been achieved? Massimo Sarmi, the chief executive of Poste Italiane, is reluctant to boast, let alone to offer advice to Royal Mail – but at his office near the Trevi Fountain he offers a vision of the post office as a “one-stop shop” that not only delivers mail but is also a bank offering financial services, such as loans, bill payments, money transfers, online retail mail order, insurance, secure e-mail, pre-paid internet cards, even mobile phones.
“In the past five years there has been a revolution,” he said. “Take something like medical care. You can use the post office online network to make an appointment with your doctor, who then notifies the local pharmacist of the medical supplies you need, which are then dispatched automatically to you in the mail. All you have to do physically is turn up at the surgery to be examined.”
The key, in other words, is diversification in the internet age, using the post office’s existing – and on the whole, trusted – nationwide infrastructure. The post office has a network that other agencies cannot match, reaching into far-flung areas of the Italian peninsula. Mr Sarmi has even flown to Kosovo to open a branch post office for the multinational forces there.
Poste Italiane, which has 14,000 offices and 150,000 employees, loses hundreds of millions of euros a year on its mail services. Increasingly, however, mail is a public service subsidised by more profitable ventures. The same goes for rural post offices. Far from being cut, a hundred have been added over the past five years.
Mail accounts for less than a third of revenues. The rest, Mr Sarmi said, comes from services that did not exist when he took over six years ago, let alone a decade ago. The Italian post office now has a corporate logo in yellow and blue and a fast website in Italian and English.
Read MoreJoint Venture between Ferrovie Dello Stato and Poste Italiane
Italia Logistica seeks to reach a position of excellence amongst the major international players by 2010.
Through the integration between the activities of Omnia Logistica (FS Group) and the activities of SDA Logistica (Poste Italiane Group), Ferrovie dello Stato and Poste Italiane have created a joint venture on equal terms that demonstrates their strategic vision and ability to systemise.
The sharing of reciprocal experiences will produce synergies that are able to create significant savings in terms of operations and undisputable competitive advantages both in terms of the market and to the benefit of the entire Italian system, even in light of the liberalisation of the goods transportation sector. The unique nature of the business model of Italia Logistica, which integrates the offer of combined railway-road transportation over long distances (typical of Omnia Logistica) with the activity of delivering up to the “last mile” (characteristic of SDA Logistica), will make it possible to bring together the movement of large volumes of goods with the wide distribution of small-scale delivery.
The operations of Italia Logistica will centre on the sorting hubs of Ferrovie dello Stato and Poste Italiane, thereby allowing the new goods carrier to take advantage of a network of pick-up and drop-off points that are extremely widespread throughout Italy.
Italia Logistica will play on the integration between railway-road transportation and a park of ecological vehicles to unite efficiency and respect for the environment. The commercial strategy of the new company will focus above all on providing high-value, integrated services for the market segments of Urban Logistics, Reverse logistics, the “inverse logistics” that deal with the flow of return goods from clients to producers, as well as the HoReCa (Hotel, Restaurant, Cafè) sector.
Read MoreMER Magazine
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