Royal Mail Group expands its international operations into China's growing B2B parcels market

Royal Mail Group expands its international operations into China's growing B2B parcels market

Key points

  • Royal Mail Group announces today that GLS, its European parcels business, is launching a partnership with one of the leading national Chinese express companies ZJS Express.
  • GLS and ZJS Express are to become a gateway to Europe for Chinese businesses. They will offer Chinese businesses a competitively priced, fully-tracked, business-to-business delivery proposition for the 3-5 working day parcels delivery market segment. The existing China to rest-of-the-world delivery market is largely made up of providers offering delivery within two to three days.
  • The Chinese market is an attractive opportunity for GLS and ZJS. China is the biggest exporter of goods to the European Union, accounting for 17.3% of the total EU imports market. Chinese exports to the EU have grown almost 50% in the last 5 years (European Commission Trade Data 2011)
  • A key part of Royal Mail’s strategy is to grow its parcels business both in the UK and overseas. In the last financial year, the various Royal Mail parcels networks in the UK and overseas handled 1.2 billion items and generated £4.2 billion of revenues or 48% of total Group revenues. The GLS / ZJS initiative is another part of the company’s overall parcels strategy.
  • Royal Mail Group recently reported its financial results for 2011-12. The Group is restoring its financial health – the business is cash positive for the first time in four years. At the Group level, operating profits after modernisation costs increased from £39 million to £211 million. UKPIL, the main UK business, reported an operating profit of £23 million, marking its first return to profitability in a number of years.
     

Royal Mail Group is announcing that GLS, its European parcels business, is forming an alliance with ZJS Express, one of the leading Chinese express companies. The partnership will provide a new, fully tracked, business-to-business parcel delivery service from China to Europe, including the UK.

GLS will provide a gateway for Chinese exporters to Europe with its service delivery platform and logistics technology. ZJS will become a GLS global partner, bringing China-wide coverage and local knowledge. The association will trade in China as Euro Business Parcel, a GLS established service brand. Parcelforce Worldwide will act as its UK delivery arm.

The alliance between GLS and ZJS is part of Royal Mail’s overall parcel strategy. As letter volumes decline, the Group is focused on generating profitable revenue streams in parcels and marketing mail. Royal Mail is well placed to benefit from the significant and ongoing increase in online retailing and associated parcel volumes. In the last financial year, the various Royal Mail parcels networks in the UK and overseas, generated £4.2 billion of revenues or 48% of total Group revenues.

Mark Thomson, Managing Director International at Royal Mail Group said: “China is a key trading partner for Europe. The China-to-Europe parcels market is growing rapidly. Last year, China was the biggest exporter of goods to the EU. This presents us with a great opportunity to link our European operations with ZJS Express’ network for the benefit of Chinese businesses exporting to Europe.”

Euro Business Parcel provides value-for-money, express services targeting less time sensitive items with delivery typically between three and five working days from China to Europe. It offers world-class customer service, including end-to-end tracking from collection through to delivery. The existing China to rest-of-the-world delivery market is largely made up of premium providers offering delivery within two to three days.

Chen Xianbao, President of ZJS said: “ZJS Express has a well-established, trusted reputation for providing high quality next-day and two-day parcel service in China across provinces, cities, counties and districts from remote outposts such as Huoerguosi Port in Xingjing to great cities such as Shanghai and Xi’an. This cooperation now enables us to meet our customers’ demands to extend our high-quality service to major European countries.”

Notes to Editors
 

1. About our Parcels
Our parcels business has three networks in the UK: Royal Mail’s UK parcels operation; Parcelforce Worldwide and Royal Mail Specialist Services. Internationally, it has Royal Mail International (which uses Royal Mail’s UK parcels network), and our European parcels operator, General Logistics Systems (GLS).

Together, and with the support of global partners, these businesses handled 1.2 billion parcels. Over the last year, this represented a six per cent increase in UKPIL domestic volumes and a three per cent increase in GLS’ volumes. Total parcel revenues for the year stood at approximately £4.2 billion, with GLS generating £1.6 billion.

2. GLS: a key part of Royal Mail Group
GLS delivers high-quality parcels, logistics and express services throughout Europe. It is one of the biggest ground-based parcel service providers in Europe. GLS employs 13,400 people and covers 42 European countries and states through wholly owned and partner companies, such as Parcelforce Worldwide in the UK, and is globally connected via contractual agreements.

3. ZJS
Established in 1994, ZJS Express has an extensive network covering more than 2,000 villages, towns and cities throughout the People’s Republic of China. The collaboration enables ZJS Express to build on its weekly 7-day collection domestic offering to enable its customers to reach European partners with value-for-money, express services. ZJS Express employs around 20,000 people in over 3,000 locations.

4. Euro Business Parcel in China
Euro Business Parcel provides value-for-money, express services for less time sensitive items with delivery typically between 3 and 5 business days from China to Europe. It offers world-class customer service, including end-to-end tracking from collection through to delivery. The China to rest of the world delivery market is largely made up of high-premium express delivery providers offering delivery within two to three days.

Parcels for Europe will be distributed by airfreight to London or Frankfurt via the major trading centres of Beijing, Shanghai and Shenzhen.

For more information please contact:

Candice Macdonald on +447436267324 or Candice.macdonald@royalmail.com
 

About Royal Mail plc
Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK’s designated universal postal service provider. UK Parcels, International and Letters (“UKPIL”) comprises the company’s UK and international parcels and letters delivery businesses operating under the “Royal Mail” and “Parcelforce Worldwide” brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.

 

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