Craig Lee, managing director of Spring GDS UK, sat down with DeliveryX to discuss how not only are they helping UK retailers go cross border, but are doing so sustainably.
Q: What would your elevator pitch be? Or your company blurb, a little bit of background information?
Spring GDS is the cross-border arm of PostNL – the Dutch postal provider. PostNL has been around for hundreds of years, but Spring as the cross-border arm since 2001.
It started as a joint venture between Royal Mail, Singapore Post and PostNL. Since 2013 it has been a wholly owned subsidiary of PostNL.
Effectively, we offer B2C, ecommerce delivery across the world working with both postal and commercial partners to ensure the best local delivery experience for consumers whether that be a delivery to their home, or a PUDO point or locker location. In the main our customers are fashion etailers, cosmetics, consumer electronics, and health and fitness brands. We also help retailers with returns, with over 100,000 drop-point locations throughout Europe
We also have a very strong traditional mail business, handling international mail for several government contracts and many well-known household business names for transactional and marketing purposes.
But with the change from traditional mail, and its decline in all markets, we have continually invested in our ecommerce business and this is now our primary business model as we help retailers keep up and service the huge demand for consumer products from multiple markets.
Q: Working cross border, what are the main challenges that you’re seeing for ecommerce retailers? Especially as we head into another very interesting peak period, how do you help the retailers meet those challenges?
One of the biggest challenges globally is there’s an effort by governments to take their share of tax from global ecommerce. Regulations are changing, not only to do with Brexit, which is a big hurdle that most businesses are over now, but we are at the tipping point, and governments are being more protective.
Local governments are ensuring that when goods are moving cross-border that they’re not missing out on VAT/sales tax opportunities, and not just in Europe. De minimis values vary across the world, there are very low values, in Canada, for example, it is just $20, but then in the USA, it’s $800 but this is under review in US Congress at present. Everyone has their own approach to it. Governments worldwide are increasingly seeing import taxes as a way to protect local businesses and ensure a level playing field.
A big part of our business to the EU. The biggest challenge here is ensuring you can sell goods across all values. It’s very easy to send goods up to the value of €150 into Europe. Once you go over €150, there’s more complexity there.
We’ve built solutions which allow retailers to send goods of all values into the EU. Our home market is the Netherlands, it goes into our own delivery network there with PostNL. Volume-wise, we deliver 1 million+ parcel deliveries daily and around 7 million letter mail deliveries daily as part of our universal service offering. Cross border as Spring, we deliver around 1. 2 million parcels per day. And that’s the part at Spring we’re focused on is – what’s moving across borders.
Q: And do you see retailers, especially UK ones, looking further afield, looking to go international?
These days, the whole world should be on retailer’s radar. It’s becoming more and more seamless to move goods around the world. People really understand there’s a big market out there as well. If you’re only domestically focused, then you’re heavily reliant on what’s happening in the UK economy. Whereas there are generally boom times and fast-growing markets around the globe and equally if orders dry up in a certain territory, there are other territories to go after.
The US economy always keeps bouncing back, and there’s a lot of spending power over there. The same with the Middle East and the Far East, as you get more middle-income families and more affluent consumers worldwide.
From a population point of view, collectively it is a substantial global market. For those companies that can make good acquisitions of customers, they will be the winners and continue to grow regardless of the local market at home.
Q: As a company, what are you looking to target in your own growth? What do you want to achieve in the coming years?
We want to keep improving our market share in the UK to Netherlands market. We want to be the number one by market share in that sense, and there’s no reason for us not to be. We are the dominant player in the Netherlands. We have a substantial market share in the domestic market, but we want to see that translated for retailers selling into that market from the UK in the future.
We have invested in our own customs teams for export and import processes, all in-house and continue to develop delivery duty-paid services to new destinations. We launched a new DDP service to Canada in May with a faster 4-7 day transit time, complementing our EU and Australia DDP services. This will continue to grow to further destinations.
We’ve got a great product, but we are not necessarily the most well-known in the UK, unfortunately, considering we’ve been around for 22 years. That is now changing, thankfully.
As we’ve been historically an international letter mail business, ecommerce for us has really driven our growth in recent years. And we now carry for some of the biggest brands in the UK as well. People in the industry know who we are, but how do we broaden that? How do we get brand exposure across those small and medium-sized companies that want to grow fast and with a focus on international markets, as that is where we can really add value.
Q: And sustainability is a big focus right now, what are you working on to be greener?
We’ve got lots of projects on the go at the moment, where we’re buying biofuel not just to use in our own trucks but we’re buying it out of the tank (OTT).
For example, for our middle mile line haul – how do you get those companies to fill their trucks with biofuel? It’s about supporting them, making sure you always buy the equivalent in those alternate fuels to try and get some scale and broader adoption across the industry.
The logistics industry, in the main is doing much work and a lot of good things on final mile delivery, especially in the main metro, populated areas. But how do you perform when you’re flying aircraft to the States or Asian markets?
We track that, we give our customers access to what their CO2 footprint is with their shipments. And we do try to work with them, on how we can work together to reduce those environmental impacts. PostNL was again listed as one of the top three most sustainable companies in the transport and logistics sector in the Dow Jones Sustainability Index (DJSI).
We are all about the solutions, so if people have problems with their supply chains, we’re really interested to hear from them. Some of our solutions today didn’t exist a few years ago and that’s been retailer-led. What do retailers need? What do smaller, medium-sized businesses need?
If anybody’s struggling, the main message is that we’re always a phone call away and we’re happy to discuss people’s needs and requirements. Sometimes we can’t help them, but we can always give them some advice and put them in the right direction as well.
Founders: PostNL, Royal Mail & Singapore Post
Founding Date: 2001
HQ Location: Netherlands
No of Employees: UK 73 / Globally approx. 640
Customers: Fashion, cosmetics, homeware, books, & consumer electronics retailers & government contracts
Meet Spring at DeliveryX World this October. As sponsors of the one-day conference, Spring will be on the exhibition floor to discuss what they can offer retailers. To see the full programme, which includes the likes of Asda, Boden, Charlotte Tilbury, Deliveroo, Lego and Tesco, and register click here.