Source of pictures: PostNord

1. From a postal company to a logistics company under the development of e-commerce

The global e-commerce market is vast and continues to grow. A survey report by Stocklytics shows that the value of the global e-commerce market is expected to reach $4.11 trillion in 2024, a year-on-year increase of 15%. Among them, the cross-border e-commerce market occupies an important position in the global e-commerce market. Data from CSDN predicts that the scale of the cross-border e-commerce market will reach $1.976 trillion in 2024, accounting for 31.2% of the total global online sales.

Under the general trend of global e-commerce development, the maturity of e-commerce development varies in different countries and regions. For example, although Europe has a relatively small geographical area, it is one of the most dynamic e-commerce markets in the world. According to ECDB data, in 2019, the sales volume of the European e-commerce market reached $423 billion. It increased to $539 billion the following year and soared to $706 billion in 2021. Later, due to factors such as market saturation and inflation, the growth rate slowed down in 2022. However, it accelerated again in 2023, and is expected to reach $708 billion in 2024.

"Currently, the two major global trends of digitalization and sustainability have had a significant impact on many postal enterprises. Digitalization means a decline in the volume of mail, and the development of e-commerce will bring long-term growth to the parcel business," said Annemarie Gardshol, President and Group CEO of PostNord. "Since its establishment, the development trend of e-commerce has also reshaped the development of PostNord."

As a leading logistics solution provider in Europe, PostNord Group is owned by the Swedish government (60%) and the Danish government (40%). Its development history can be traced back to the 17th century. In 1624, King Christian IV of Denmark founded the Danish Post. In 1636, Swedish statesman Axel Oxenstierna founded the Swedish Post. In 2009, to integrate the postal systems in the Nordic region, Post Danmark A/S of Denmark and Posten AB of Sweden merged to form PostNord AB, becoming a postal and logistics operator in the Nordic region. In 2011, it was officially renamed PostNord to create a unified Nordic brand image.

From 2010 to 2016, in order to seek growth, PostNord carried out a series of acquisitions in multiple fields such as heavy logistics, cold chain, third-party logistics, and digital products to strengthen its market position. From 2019 to 2020, with the rapid development of e-commerce and the increasing prominence of the digital market, PostNord focused its strategic center on the e-commerce business and formulated a clear roadmap to adapt to market changes and implement its focused strategy.

Source of pictures: PostNord

PostNord's business is mainly divided into parcel and logistics services (e-commerce and logistics) and digital and physical communication services (communication services), and can be further subdivided into four segments: Direct Link, Logistics, PostNord Strålfors, and PostNord TPL.

Direct Link, an important business unit under PostNord, was established in Stockholm, Sweden in 1986. As an extension of international sales business, Direct Link provides logistics distribution and warehousing services globally. While focusing on parcel delivery in the Nordic region, it promotes the expansion of global business.

Logistics mainly includes consolidated shipments, partial cargo, express and expedited services. It supports the parcel business through commercial and operational synergies and realizes its own profit growth.

PostNord Strålfors is mainly dedicated to developing omnichannel solutions for customer communication and payment solutions, and forms synergies with PostNord's mail business.

PostNord TPL focuses on expanding third-party logistics solutions in the Nordic region, enriching the product portfolio, and forming synergies with the parcel business.

In order to seize the growth potential of e-commerce imports and promote the flow of cross-border parcels in the Nordic region, in April 2024, PostNord Group merged three different international business units, PostNord Germany, PostNord Worldwide Connect, and Direct Link, into a new international business unit, PostNord International, to provide global e-commerce distribution services for e-commerce enterprises, aiming to further enhance market competitiveness.

As one of the fastest-growing e-commerce markets in the world, China is highly regarded by PostNord for its importance and the challenges it presents.

 PostNord has specifically established an Asia-Pacific region with four offices: In 1997, the Asia-Pacific regional headquarters was located in Singapore. In 2004, the Hong Kong export transshipment and distribution center was put into use. In 2012, a representative office was established in Shenzhen, focusing on Chinese business. In 2020, Shanghai branch Ruilian Logistics was established. Relying on its extensive postal network, it provides customized services such as cross-border delivery, return management, customs affairs, and order fulfillment for e-commerce platforms and freight forwarder enterprises.

Annemarie Gardshol, President and Group CEO of PostNord, said, "In short, we have transformed from a postal service company that provides parcel delivery to a logistics company that also offers mail services."

Source of pictures: PostNord

2. Strategic focus under the challenges of the global parcel market

The business flow drives the logistics. The growth of global e-commerce and the expectations of consumers drive the demand for logistics and transportation services. Research institution Mordor Intelligence predicts that the scale of the express, courier, and parcel market in Europe will reach $133.94 billion in 2024 and increase to $167.94 billion by 2030. However, changes in the global environment bring different challenges and opportunities to the logistics market.

Under the influence of online shopping, customers and consumers have higher expectations and their preferences have also changed. For example, more and more people prefer to have parcels delivered to their homes or to parcel pickup lockers, and the demand for precise delivery times is increasing. The "Nordic E-commerce Report Autumn 2024" points out that 46% of people in Sweden prefer to pick up parcels at service points after online shopping. In Finland, pickup lockers are the most popular way to receive goods, and 44% of people in Denmark prefer service points for pickup.

In addition, the huge volume of e-commerce parcels has attracted a large number of new players to enter the market, especially in the last mile, where competition among emerging operators is intensifying. In the past, PostNord's main competitors were traditional logistics giants. However, today, the logistics and transportation market has become more complex. A large number of new market participants focus on specific links in the logistics chain to improve efficiency and enhance customer service. This change brings new service options, and consumers can choose different logistics providers, delivery methods, and payment methods.

Therefore, the parcel logistics market is characterized by fierce competition, involution in prices, high innovation, and rapid changes. To remain competitive in the market, logistics service providers need to meet the high requirements of customers in terms of predictability, speed, punctuality, price, and sustainability.

In the fierce competitive environment, PostNord has set the goal of creating value through parcel and logistics businesses. By leveraging the operational synergies and good profitability of each business area, it aims to win in the parcel business and strive to become the market and cost leader in the parcel business in the Nordic region. Cost leadership means that each parcel in all delivery channels can provide the lowest cost. To this end, PostNord has formulated five strategic initiatives:

First, cost leadership: Customers hope to get value for their money. Maintaining the lowest cost per parcel in the highly competitive logistics industry is crucial. In 2023, PostNord launched an extensive cost leadership plan to enhance its competitiveness in the parcel market. Cost leadership is not just about cutting costs; it requires a fundamental and long-term transformation of the operating model. By streamlining and improving processes, enhancing quality, and developing flexibility, it can cope with fluctuations in parcel volume.

Second, the last mile: With the influx of a large number of new players, PostNord has also invested a great deal of time and effort in the competition of the last mile. For example, it continues to expand the network of parcel pickup lockers, improves services by developing home delivery, parcel pickup lockers, and other self-service forms, provides consumers with multiple options, and reduces the cost per parcel. Currently, PostNord has nearly 13,000 owned vehicles in the Nordic region and has also established a Nordic parcel sorting terminal network.

Source of pictures: PostNord

Third, digital-driven: The competition in the industry demands a higher level of digitalization, automation, and advanced analytical capabilities. PostNord is developing new digital capabilities and working methods to support its vision of becoming a market leader.

Fourth, sustainable development transformation: Adhering to global sustainable development is one of PostNord's three commitments in logistics development. By converting vehicles from relying on fossil fuels to fossil-free fuels, it achieved the goal of being fossil-free in 2023.

Fifth, coordinated development of global and Nordic businesses: Currently, PostNord's focus is still on transitioning to a more competitive business model, adjusting the business model to meet demand, implementing price adjustments, and gradually phasing out unprofitable business segments. At the same time, it uses the Nordic network and services to increase business from large international e-commerce companies. By providing global senders with a simple and frictionless way to enter the Nordic region, it further realizes the goal of global business development.

Relying on its extensive global postal network and efficient logistics network, PostNord provides a variety of global delivery solutions, including parcels, warehousing and order fulfillment, distribution, palletized goods, consolidated shipments, less-than-truckload (LTL), and full-truckload (FTL).

As of 2024, PostNord has delivered a total of 243 million parcels and 994 million letters and other mails, with a parcel delivery success rate of 94%. There are 9,500 parcel distribution points in the Nordic region, and 19,000 service points and express lockers. Few logistics providers can have such a large number of terminals, service points, and extensive distribution capabilities in the Nordic region.

Source of pictures: PostNord

As PostNord said, boundaries have never been an obstacle. Under the wave of e-commerce globalization, the boundaries between e-commerce and logistics are intertwined and mutually reinforcing, jointly constructing a prosperous and opportunity-rich new pattern in the European e-commerce logistics field. In the face of fierce market competition and ever-changing e-commerce demands, how to efficiently manage cross-border logistics and improve the reliability of last-mile delivery has become the key to success. Whether it is a cross-border e-commerce platform or a logistics service provider, they need to find a balance between the global and local markets, as well as between low cost and high quality, to achieve long-term success.

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Official account: Cross-border E-commerce Logistics Baixiaosheng