Top searched
Results (0)
Hundreds of millions of crowns worth of shipments are transported every year, and the coronavirus has made this trend even stronger.

The delivery battle: Companies are making hundreds of millions thanks to parcel shipping. Who will take the biggest bite of the market pie in 2021?

Radek Polák
28.Jun 2021
+ Add on
5 minutes to read
Simona Kijonková

During the pandemic, when most shops were closed, parcel shipping became a hit on which a large number of Czechs began to rely. The trend of sending parcels as well as other shipments has thus become even stronger. Tens of millions of parcels are sent in our country every year.

The dominant provider of shipping services is the Czech Post (Česká pošta). Its importance is evidenced, among other things, by the fact that it is the second-largest domestic company after Agrofert, employing just short of 30 000 people.

According to its director, Roman Knap, Czech Post sends up to 250,000 shipments a day on average, which means more than 90 million shipments a year. The majority of these are still letters, but the importance of parcels is growing.

"According to all forecasts, by 2023 the volume of parcel mail shall for the first time exceed letter mail in terms of revenue,"

Knap recently told LP-Life.

"People are simply sending less and less snail mail, digitalisation is everywhere. There will probably be an obligation to expand the use of data mailboxes, so the Czech Post needs to be thoroughly prepared for this trend."

he adds.

At the same time, the Czech Post is working closely with some other large entities and authorities. Examples include the Czech Social Security Administration (Česká správa sociálního zabezpečení), the Postal Savings Bank of the ČSOB group (Poštovní spořitelna skupiny ČSOB) and the betting company Sazka.

Open in gallery (4)
Roman Knap, generální ředitel České pošty
Roman Knap, generální ředitel České poštySource: PETR TOPIČ / MAFRA / Profimedia

Increase in parcel transport by up to 60 percent

However, the postal monopoly situation ended more than eight years ago. Nowadays, there are also a number of other players dealing with shipping services on the market. One of them is ShipEx, which has entered into contracts with DHL, UPS, FedEx, PPL and other well-known companies. ShipEx is basically a comparison engine of shipping companies, which gives the interested party a chance to find the most advantageous service.

Prodej unikátního rodinného domu - 755 m²
Prodej unikátního rodinného domu - 755 m²,

"By working with all the key shipping companies, we provide the widest range of shipping services. At the same time, we provide all the customer service. However, the range of our offer is not our only advantage; thanks to the large volume of our operations, we’re also one of the cheapest,"

says Artem Salichov, founder and owner of ShipEx.

Over the recent years, the delivery industry has been greatly facilitated by the development of the Internet.

Open in gallery (4)
Balíky tvoří vysoce výdělečnou součást byznysu
Balíky tvoří vysoce výdělečnou součást byznysuSource: Freepik

"The customer doesn't have to go anywhere, we simply pick up the shipment at his place. Everything is handled online. In the last year, partly because of the coronavirus pandemic, we have seen a 60 percent increase in the volume of shipments. We had to build our own software and find the right people for it, as technology is key for us – all of this without any investors. For the next period, we are preparing our own mobile app. Moreover, in the context of emphasizing the quality of the environment, we expect our transport vehicles to become gradually electrified over time,"

Salichov thinks.

Open in gallery (4)
Přeprava zásilek je založena na okamžité komunikaci
Přeprava zásilek je založena na okamžité komunikaci Source: Freepik

Double increase in turnover

Simona Kijonková's delivery service Zásilkovna has also been a phenomenon of recent years. It has already managed to become a delivery giant in the Central European region where it operates. While the company had less than 20 million shipments the year before, last year this number rose to 40 million shipments. This year, it is expected to be around 70 million! This is also thanks to the association with the Lidl chain store and Radovan Vítek's CPI group, which should bring a total of 2,500 new parcel drop boxes, through which up to 80,000 parcels will be delivered.

"Zásilkovna has never been a logistics company, but primarily a technology company. Otherwise, we would never have grown by 140 percent year-on-year. We will certainly never sell or buy anyone's goods. We are what we have always been, which is a digital platform, helping online stores to expand, take care of logistics and, in the future, of payments. Zásilkovna is successful because of smaller businesses, and we are de facto the bridge between them and e-commerce, which would never survive the pandemic situation without drop boxes,"

Kijonková said in an interview with the E15 magazine.

Until recently, Zásilkovna still cooperated with the Czech Post, delivering 600,000 parcels to customers last year alone. However, due to the allegedly poor quality of Czech post‘s service, it decided to end their partnership in January. One of the reasons for this was that, according to an investigation, around the Christmas holidays the state-owned giant managed to deliver only around 15 percent of all orders placed by Zásilkova by the second day.

"In contrast, even in the run-up to Christmas, we were delivering 97 per cent of parcels within our wide network of delivery points by the second day. What's more, we lacked a proactive and partnership approach from the Czech Post,"

Kijonková said, adding:

"Moreover, during the Christmas season, the Czech Post publicly presented false information damaging our brand. It was not possible to continue this partnership and we were therefore forced to take the decision to end it."

While Knap admits that some problems may have occurred, he does not attach so much importance to the now-former cooperation, saying:

"We have a network capacity of 70 million packages. Do the math on what the percentage drop is yourself."

Zásilkovna responded to this statement by saying that the end of cooperation with Czech Post does not bring any negative consequences to its customers and should lead to improved service and a better customer experience.

"The Czech Post was constantly increasing prices that did not correspond to the volume of shipments. As a result of this regular price increase, we reached a point where we were basically losing money on every shipment. In addition, the Czech Post has told us that from January 2021 there will be further increases, which, regarding to the annual number of shipments we have been relaying to the Czech Post would put us on completely unacceptable terms,"

Kijonková added in the same breath.

Open in gallery (4)
I díky zázemí se přepravním službám daří
I díky zázemí se přepravním službám daříSource: Freepik

Changes on all fronts

While the Czech Post has closed some of its branch offices and is actually reducing the number of its employees, others prefer to expand, as the examples of ShipEx and Zásilkovna show. Moreover, there might be an even greater change in store for the dominant provider of shipping services. The Ministry of the Interior, as its founder, plans to split Czech Post into two separate companies within three years. One of them would manage the loss-making branch network and provide services for the state. The other one would attend commercial services, especially the profitable transport of parcels.

"We have set up the internal structure to make it work. But it has to be really transparent and clear which of those services are competitive, which are commercial and operating in the open market as well as which are guaranteed to the citizens by the state,"

Knap is already aware of the seriousness of the situation.

ShipEx's Salichov thinks that the future of the industry belongs primarily to private companies that are better able to anticipate technological developments and specific customer needs.

"The Czech Post is a state-owned company. I don't expect it to change in any major way anymore. Its importance will rather decline over time,"

he predicts with a certain caution.

The shipping business is gradually growing. But it is also increasingly moving away from the formerly popular letter post to focus on parcel shipping and the new technologies that come with it. Private companies, in particular, are gaining strength in the market. The Czech Post, on the other hand, is looking for its own new face to help it withstand competition and maintain its privileged position in the 21st century. If it fails to do so, it may not survive in its current form.

Did you like the article?
Discussion 0 Enter discussion