March 20, 2019 / 12:26 PM / a month ago

Poste Italiane aims to ride e-commerce wave to boost parcel delivery

MILAN (Reuters) - Poste Italiane aims to more than double the number of parcels it delivers by 2022, the head of its Mail and Parcel (M&P) unit said, as the former postal services monopoly presses on with its restructuring.

FILE PHOTO: Poste Italiane headquarters is seen in Rome, Italy, May 30, 2016. REUTERS/Alessandro Bianchi/File Photo

The group, which now comprises insurance and financial divisions and a digital payments unit in addition to M&P, has suffered falling letter volumes since at least 2008.

But Poste recorded growth in parcel revenue in 2018 that for the first time in 10 years compensated for the fall in letters, showing that the restructuring was starting to pay off, it said.

“We aim to deliver 100 million parcels in 2022 compared with 45 million our staff delivered last year,” Massimo Rosini, head of M&P division, told investors in London.

The group wants to increase its market share for e-commerce parcel delivery to 40 percent by 2022 from 33 percent in 2018.

E-commerce is projected to grow rapidly in Italy as the country catches up with other European countries such as Britain where shopping online is much more common.

To compete with e-commerce giant Amazon, which is offering its Prime delivery service in the biggest Italian cities, Poste plans to fully implement a joint delivery system introduced last year and is developing an alternative network of delivery points.

Poste signed an agreement last year with labour unions to extend parcel delivery to the weekends and have staff hand over both parcels and letters to clients, while reducing the frequency of letter deliveries.

Revenue from the M&P division is expected to remain almost stable at around 3.5 billion euros this year, accounting for around one third of Poste’s total revenue of 11 billion euros (9.4 billion pounds) expected for this year, Rosini said.

Poste CEO said on Tuesday the group was studying the possibility of delivering with drones and driverless vehicles to win more clients.

(The story corrects third paragraph to say parcel revenue growth outweighed drop in letters for first time in 10 years)

Reporting by Francesca Landini; Editing by Edmund Blair

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