I had an article published here http://www.articlesbase.com/business-articles/product-delivery-or-mail-fulfillment-and-maximising-profitability-when-courier-is-cheaper-than-post-from-spain-2318936.html and have received some interesting feedback which should be read by anyone interested in increasing their profitability in exporting to Europe.
The feedback comes from Joe Domican, previously Operations Director of Guernsey Post.
Nice article shame that the facts are mixed up. I wrote the operational
manual for postal de-regulation in the UK and currently work with
e-commerce traders out the channel isles ,Uk,and Switzerland. To suggest
that a postcard now cost more than a large packet because of “discounts”
just is not true-not even in Andalucia! Still I wish you and your
company luck and I have an increasing number of clients who trade via
multi-media outlets including a couple that you refer to ( e-bay -Amazon
etc)whom wish to grow into Spain so I’ll be testing your observations
soon! Good to read an article on the industry ! best wsishes Joe
Hi Joe
Many thanks for your interest and the time you have taken to write to
me.
If I may make one comment on your reply, the original article says “A
door-to-door service can never deliver a postcard cheaper than the
mail”, which means that bulk mailing services, outside of major
population areas, are likely to remain the preserve of the postal
monopolies for some time to come. Equally, of course, a postcard can
never be cheaper than a package but we can certainly courier a 50g
letter to the UK, frank it and put it into Royal Mail 1st Class for less
that the Spanish Correos will charge to send the same letter through the
post. The economics are €1.07 charge by Correos compared to 39p
for Royal Mail, with plenty of room for a profit even if you are only
shifting 100 letters a time =<5kg by courier. Delivery time is roughly
similar, charge to the public in Spain is €1. People like me
have a lot to learn from old-timers like you so all feedback is closely
scrutinised for helpful advice.
Of course, the interesting development is that the far-flung deliveries
were subsidised in the past by, for instance, parcel services. This
high margin “cream” is being creamed off by increasingly competitive
couriers which will eventually leave the postal services sending
postcards to the Islands and Highlands while postcards to Glasgow
central are handled by an independent company. This has huge
implications for the single price national postal services.
The point of my article is that innovative firms are specialising in
reducing the cost of deliveries throughout Europe. Therefore, if your
business relies on moving relatively small parcels from A to B (rather
than, say, pallet size quantities), there are much cheaper and more
efficient ways of doing so than queuing at the post office. This is
giving a competitive advantage to those that have worked out how to use
the “alternative” delivery services.
One of the concepts that Citibox is trying to refine is the concept of
hub-to-hub for the public. People have their UK mail and parcels sent
to our Birmingham hub for transport to one of our Citibox offices which
are, in effect, mini-hubs from where customers collect their produce
shipped securely from the UK on a known delivery day for a fraction of
the cost of a door-to-door shipment. As a result, an Amazon book
weighing 500g would be free to Spain (after the initial subscription is
paid) rather than costing up to €6.
May I quote your reply on our website, in its entirety together with my
response?
Many thanks. Edmund
Thanks Edmund yes feel free to quote me.You are absolutley right the old post arrangements are in a state of transition-good stuff they need to be-maybe I misread your reference to postcards so sorry about that! I’m actually part hosting a event in Jersey in two weeks with Swiss post and lots of internet traders trying to grow international e-commerce and fulfilment. One of the issues will be LVCR and the ever growing VAT avoidance which now is the “norm” to sell below Euro 22. Something which Gibralter should be doing a lot more of into Spain perhaps? Anyhow all the best . Joe
Thanks Joe. You can´t get a blank DVD worth 50p from Gibraltar into Spain without being stopped in customs for hours so all Gib stuff goes via the carriers´main hubs (Paris for FedEx etc). This will remain the case until UK/Spain come to some agreement over what the Spanish feel was a wrong commited in around 1780 when they granted the UK a right to a base in Gib. Documents only over this border (and cigarettes by the container load with some families employed walking back and forth all day with their duty free allowances).
Well aware of the Channel Islands, have used Moonpigs and 7 Day Shop for years. Guess what? 7 Day Shop doesn´t deliver outside the UK. If you want cheap batteries or ink cartridges in Spain you have to use Citibox´s UK address and we ship them to your nearest Spanish office. So, in some ways, we are all trying to do the same thing. The internet created a global market but governments don´t like that. Some of our customers ship from outside the EU to the country where they think customs duties and VAT are likely to be least enforced and then, once the import is inside the EU, they can ship it free across borders.
This almost makes me sound like an accessory to tax avoidence, on the contrary, we do everything we can to alert Customs to anything which looks dodgy to us on the basis that we have nothing to loose and everything to gain but UK customs are terrible and don´t repond until well after any evidence has gone missing http://courier-spain.co.uk/blog/tag/cigarette-smuggling-gibraltar/ whereas http://courier-spain.co.uk/blog/sad-tale-ebay-courier-parcel-spain-uk-customs/ they are quite capable of random acts of stupidity.
(Name of a courier company) in Spain uses a network called Sending. It doesn´t work very well. There are too many loose networks of independant couriers linked together (like Amtrak used to be in the UK but I have been away for 7 years) in Spain and consolidation is badly needed, as in the banking sector here.
I hope that some of this email may be helpful for your forthcoming conference and I am sorry that I shalln´t be there.
Wth many thanks for your permission and best wishes for your conference. Edmund
