Interview – Geopost talks trends, volumes and partnerships

Geopost’s Thiemo van Spellen discusses European parcel market trends, how to deal with the new Chinese e-merchant volumes, and the new China – Europe cooperation with JD.com/JD Logistics, in an in-depth interview with CEP-Research.

Speaking at the recent Leaders in Logistics Summit in Barcelona, Geopost’s head of global accounts also reviewed the international parcel operator’s key growth areas such as out-of-home, food, cross-border deliveries, SMEs and healthcare.

CEP-Research: Let's talk about market trends in 2024 and how things are going from a Geopost perspective.

Thiemo van Spellen: “Actually, 2024 has started quite well, although 2023 was not even such a bad year looking at the volumes. Volumes are looking good, although it's only March. There are big changes in the mix and out-of-home has really grown, well over 25% which is far above the average growth of all the others. That is also impacting the way we manage the network.

“There are three drivers that we see: one is out-of-home, but there’s also C2C and social media selling. Also the more traditional e-commerce companies are really setting clear targets on the share of deliveries they want to have in out-of-home for either cost reasons, sustainability reasons, or consumer demand.

“And finally there are some very large brands from China who are accelerating their presence on the European market as well. Everybody's talking about these brands, and many (delivery) companies are working for them, so are we. This is really also something to carefully approach. We all want to have this kind of business, and the best way to get it on board, I think, is also by offering this combination with out-of-home, which also meets the low-rate expectations of many of these shippers.”

CEP-Research: You're talking about Temu and Shein, obviously. Their volumes that are coming into Europe from China are massive at the moment. How big is the impact on capacity from these Chinese marketplaces, would you say?

Van Spellen: “It's quite big because of some of the markets they're focusing on, like the Baltic States, for instance. There’s a lot of concentration on Eastern Europe by these players.

“They’re offering huge volumes, and we want to make sure that we provide a fruitful and beneficial cooperation for both sides, and that we can maintain the service levels that we want to maintain, especially when it's out of home. With lockers, for instance, at some point you may reach the occupancy limitations.”

CEP-Research: How do you see other trends? More marketplace growth, more individual e-retail brand growth, or B2B shops?

Van Spellen: “It's marketplaces, clearly. They are still accelerating. So that's clearly a trend that is still here and will not disappear so easily.”

CEP-Research: Last year you upgraded day-definite cross-border delivery within Europe. How is that going?

Van Spellen: “We are focusing a lot on cross-border business and it’s growing above average. I was very positively surprised about the performance levels there. We saw that within 12 months the average performance in Europe on cross-border day-definite had really significantly increased, so it's really a service that I feel very confident selling.

“And then, of course, we have been focusing on really extending the out-of-home network. Last year we reached the 100,000 out-of-home locations mark. Despite the growth we've already seen, we want to accelerate that growth because we really believe the market is asking for it, so we need to offer it more aggressively.

“The food business is also doing well and showing good growth with new countries. In the end, we want to have this temperature-controlled food delivery capability across all of Europe at some stage.

“In addition, B2B is still very interesting, also from a cross-border perspective.  So we are reviewing the way that we do, for instance, multi-parcel shipments cross-border to be able to grab more business there.

“And the SME market is also large, especially if you combine these things. There are so many large shippers across Europe that strategically counterbalancing that more with SME growth also makes sense. So we are rolling out specific digital solutions as well for the SME market.”

CEP-Research: What about the healthcare and pharma sectors?

Van Spellen: “Healthcare is a bit more challenging market than, for instance, the food market, because the competitive landscape is already much more developed than it is in food, if you look at the European network. We have a few pockets, mainly due to acquisitions like in Spain with TIPSA or BK in the Netherlands, or built from scratch over the past years like with Chronopost (in France). We want to make this more international.”

CEP-Research: In terms of cooperations and partnerships, last year there was the cooperation agreement with CEVA Logistics, and there was the partnership with JD.com. Can you talk about those two partnerships?

Van Spellen: “With CMA CGM, this was more like a memorandum of understanding, where we agreed to invest time in finding ways to grow together. That’s still ongoing, and we're exchanging with them very regularly.

“With JD.com and JD Logistics, the partnership was launched in December, creating an end-to-end solution for Chinese mid-sized and smaller e-commerce companies to sell to European consumers. And with JD.com, Lenton, DPD China and our Last Mile Network in Europe, we've created this end-to-end.

“So JD sells the service and does the collection in China. DPD China and Lenton do the airline haul and customs clearance. Then with Chronopost in France, that’s the first entry point into Europe. We do then the inbound clearance and the last mile delivery in Europe. So it just started three months ago and it's looking quite good.”