Competitor Watch
Hermes Group has reported a 6% increase in revenues to €3.2bn in the year to the end of February 2019, while European parcel volumes rose 6.7% to 817m items.
Hermes Group said the growth was achieved despite challenging conditions, particularly rising labour costs in major markets such as Germany. Hermes Group revenues have increased 10% a year on average for the past six years, so the growth rate reported for last year would suggest its growth is slowing.
Hermes said its dedicated B2C and C2C cross-border parcel network now covers 80% of the key European markets, using co-operation models for other markets. It also operates the ‘largest parcel shop network’, with around 40,000 parcel shops across key European markets. It claims to be number two in the parcel market in Germany, the UK and France and market leader in two-man delivery in Germany and France.
The company’s growth drivers last year were its French parcel delivery subsidiary Mondial Relay (volumes up 39%), cross-border deliveries within Europe (up 35%) and the majority-owned Germany same-day delivery specialist, Liefery (volumes up 22%). No separate revenue and volume growth figures were disclosed for Hermes’ core markets of Germany and the UK. Likewise, Hermes did not report on profitability of the business.
Hermes Group invested €162m in its European infrastructure last year, including the company’s new depot in Hemel Hempstead. This has enabled later acceptance times into the Hermes UK network, and a 44% increase in Next Day delivery.
Next day delivery is a growing area of our market with more and more people expecting to receive their items just one day after ordering. We are continuing to add new customers to our Later Acceptance Times offering for our Tracked 24 product, which enables us to accept items into our distribution centres until 1.30am.
In a recent RMtv live session at Warrington Mail Centre, service delivery director - Central, Geoff Braden, said: ‘The market is changing dramatically. People’s personal shopping habits are changing – not just with online ordering; they want next day delivery and to order as late as possible in the day. It’s how we prepare ourselves as a company to deal with that.
‘In the next few years we are going to be delivering parcels with a few letters. Volumes will increase as will the size of parcels. We are going to have to adapt our equipment and mail centres to handle those changes. It’s an exciting future for all of us, but we have to earn the right to be in that market.’
