Apart from marrying six times and breaking with the Catholic Church, King Henry VIII of England also founded the Royal Mail postal service in 1516. More than 500 years later, the company still has the State as its main shareholders and is dedicated to delivering packages generated by electronic commerce with devilish digital efficiency. The British operator's business has expanded throughout the world and has been growing strongly in Spain for some time through its subsidiary GLS Spain.
Luis Doncel, group regional manager director in Iberia of GLS Spain, explains that the company had a turnover of 420 million euros in Spain last year and that for the current year – the fiscal year ends on April 5 in the United Kingdom – the forecast is to increase the income between 12% and 15%, more than the sector average.
“If I had to cite one reason why we are growing above the rest, it would be the business model,” says the manager. GLS Spain is today the result of the purchase of seven companies since 2010, including ASM and Redyser, which have joined forces and enhanced synergies. Its routes, vehicles, logistics centers and delivery points now respond to a single model focused on proximity. The company has 1,600 employees, 600 agents and 5,400 delivery points in Spain. Its activity involves in one way or another nearly 9,000 workers.
“On a day of normal circulation, in Madrid we can reach 5.2 million people in 20 minutes. And the model is replicated in Barcelona through the facilities of Santa Perpètua, Viladecans and l'Hospitalet de Llobregat," says the manager. A package can leave Girona at five in the afternoon and be delivered the following noon in Cádiz, more than 1,000 kilometers away, and for that you need an army of workers, facilities and technology organized to the millimeter.
Doncel explains what anyone who has received a package understands: “Business is not easy at all.” Operators must plan the fastest and most efficient routes, and do so at the highest speed and lowest cost possible, which includes severe pressure on fuel and workforce. Added to these variables are logistics centers and technology, which are decisive. Royal Mail itself has four artificial intelligence development centers spread across Europe.
“There are access barriers that make it difficult for new competitors to enter” and, at the same time, the parcel business has been characterized in recent years by a sectoral concentration in which GLS has been key. “In our case, it did not make sense that seven companies were working in the same area. Concentration is still necessary, and we actively listen to the market in search of opportunities,” says Doncel.
One of the problems of parcel delivery companies is the reluctance of customers to assume the cost of transportation. The extra price of a few euros when paying online has become one of the main reasons for customers abandoning the purchase. The first executive of GLS in Spain warns that this dynamic puts great pressure on transport companies, to the point that some are incapable of surviving.
However, the volume and number of online buyers continue to grow, making the sector increasingly important. The National Markets and Competition Commission (CNMC) estimates that in the second quarter of last year, electronic commerce moved more than 20 billion euros for the first time, 12.7% more.
“Our activity is necessary for the country's blood flow to function,” but “we have a feeling of lack of recognition,” laments Doncel. “For us, the entire month of December is a working month” and “on the Black Friday weekend, GLS delivers more than a million packages,” he explains. “We have developed a lot of technology to achieve this.”
GLS is the Spanish division of Royal Mail, just as the German Deutsche Post operates in the country through DHL. They have managed, with an international vision and an early commitment to parcel delivery, to also become major players in Spain. And Post Office? Why has it been left out of this equation? “I think Royal Mail or Deutsche Post got it very right with their internationalization strategy. They have done very well when we entered the technological revolution and electronic commerce. Correos did not do this process and, despite some attempts, it continues to depend on the Spanish market, of which it is captive,” says Doncel.
