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Peter Somers, CEO of Belgian cross-border mail carrier bpost international, tells European Outlook about the company’s rise to prominence over the past 10 years and how shifting commerce patterns are affecting his business. By Jane McCallion
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post international is a specialist international business mail service provider operating in Europe, North America and Asia. It is a fully owned subsidiary of bpost – the Belgian national postal service. bpost international is currently headed up by CEO Peter Somers, who has been in place since 2002. When he joined, the company was underperforming; he and his team undertook a huge transformation over a 10-year period. “The work to turn around the company was completed in four phases. Phase one took place between 2002 and 2004 and looked getting the basics right – improving service levels, streamlining internal processes and looking at our
pricing strategies. By the end of this phase, we had already begun to win back volumes.” The decision was taken to focus on the Belgian part of the company’s operation. “The Belgian cross-border mail market has been open for a very long time. We had competition from Royal Mail, Deutsche Post, La Poste and others. However, we were not active in their respective countries and for a whole two years we were in a situation of one-way competition. I wanted to change that and that became the basis for phase two.” Between 2005 and 2006, bpost international began to sell its cross-border mail products in its neighbouring countries: UK, the Netherlands, France, 3
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Germany and Luxemburg. “In this second phase, we only focused on these five markets, as we were easily able to bring the mail to our main sorting office in Brussels, which is central not only to Belgium, but also to our neighbouring countries.” The successful completion of this phase once again raised throughput volumes, and also gained bpost international a number of long-term customers. This success was followed by a decision to penetrate further into Europe, as part of phase four, and expanded into a further five Western European countries, bringing the total today up to 10. “At this time we also moved into the biggest mail market in the world, which is of course the USA,” Somers says. bpost international’s initial approach to the American market was from a wholesale point of view. Then, at the end of 2009, the opportunity arose to acquire a local company.
“We as bpost international focus on business mail, of course, but that is a market that is in slow decline. However, on the other hand, the parcel market for e-commerce customers is booming”
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“The purchase of MSI (Mail Services International), which is based in Washington Dulles International Airport, allowed us to become more active in the American market, particularly on the retail side. It also gave us direct access to the American customers who ship volumes abroad,” explains Somers. “Another advantage of this acquisition was that MSI also has sorting offices in Chicago and Toronto, which we now own and can use to handle the mail volumes coming from and going to the United States. “The final phase – phase four – is the one that we are in currently and lasts from 2010 until 2012,” Somers adds.
bpost international
Having successfully grown its European business and penetrated the American market, bpost international set its sights on Asia. Until this point, bpost international had been handling international mail, but at the end of phase three the decision was taken to move into the parcel and e-commerce market. “This is now a fully fledged part of our products portfolio, including not just lightweight packets but also tracked parcels.” What is special about Asia, in this respect, is that it is the ‘hub’ of e-commerce, which relies on global parcel shipping to function. “We as bpost international focus on business mail, of course, but that is a market that is in slow decline. However, on the other hand, the parcel market for e-commerce customers
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is booming; on average it is growing 10 percent year on year in Europe and even more in the USA and Asia.” In October 2011, the company acquired two local companies, one in Hong Kong and the other in Singapore, consolidating its position in Asia and in what it calls ‘the triangle’. “The triangle is basically these three continents,” says Somers. “While it’s true that we don’t cover the entire world, by covering Europe, Asia and North America we are present in the three most important international mail delivery economies.” The company also intends to open an office in Beijing. “We want to support Chinese e-traders to sell their products abroad and really, that’s at the heart of our strategy,” says Somers. “We want customers
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in Europe, Asia and America, particularly e-traders, to know that we can offer them a safe and secure logistical supply chain system. They can see all their parcels tracked and traced, customs cleared and secure all the way to its recipient.” While the past 10 years have been a success, there are still challenges for bpost international to overcome. “One challenge is what’s happening in the international markets in terms of capacity on airlines. As an international and crossborder carrier, we do use space to ship our volumes and there are always problems coming out of Asia and Europe. And in the coming part of the year, in the run-up to Christmas, the shortages are even more pronounced,” says Somers, “But we have a lot of specialists working on this so we always
“In five years time, I see us as one of the top five players in the Asian cross-border market“ find the right solution.” Airline security is also a problem, particularly since the Yemen bomb in 2010. “That had a serious impact on the way we ship volumes, particularly to the USA. So that is another challenge we have to overcome.” Somers is very optimistic about the future for bpost international. “We came up from zero in a world full of competition from much bigger companies. This is starting so in five years time, I see us as one of the top five players in the Asian cross-border market for e-commerce. If we can achieve that, it will be great and I think that we are able to and capable of doing it.” 7
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bpost international E.M.C. Building 829 C B-1931 Zaventem – Brucargo Belgium Tel: +32 (0) 2 276 25 00 Fax: +32 (0) 2 276 25 10 Email: sales.international@bpost.be
www.bpostinternational.com